Situation: The recipient owns two bank accounts, a checking account that pays interest of $2 a month and a savings account that pays interest of $19 once a quarter.
Analysis: The checking account interest is received more than once a quarter and is therefore not infrequent and not excludable under this provision. The savings account interest is received only once a quarter and is, therefore, infrequent. Since the total of all the unearned infrequent income does not exceed $20 in a month, the savings account interest may be excluded under this provision.
Note that in determining whether any interest income in this situation can be excluded as infrequent, we consider only the amount of income received once in a calendar quarter and compare that amount to the $20 unearned income limit for the infrequent/irregular income exclusion. Accordingly, in this situation, we do not add the $2 monthly checking account interest to the $19 savings account interest.
Also note that if the individual in this example has no income other than the savings and checking account interest, the checking interest is excludable under the $20 general income exclusion. See SI 00810.420 for a discussion of the general income exclusion.