11 GCA § 34104: Definition of Earned Income.

For purposes of this Chapter, the term earned income means wages, salaries or professional fees and other amounts received as compensation for personal services actually rendered, but does not include that part of the compensation derived by the taxpayer for personal services rendered by him to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered. In the case of a taxpayer engaged in a trade or business in which both personal services and capital are material income-producing factors, under regulations prescribed by the Director of Revenue and Taxation (the Director), a reasonable allowance as compensation for the personal service rendered by the taxpayer, not in excess of thirty percent (30%) of his share of the net profits of such trade or business, shall be considered as earned income.