Both get reported, you'll see Lines 16 and 19 of the Recovery Rebate Worksheet asks for each of them

Im not sure I understand your second question, "earned income"  doesnt really come into play for the Recovery Rebate/Stimulus, its based on AGI.

There is a phase out for the amount you're entitled to, from 75-100K for single and 150-200k for married joint, for every $100 over the lower threshold amount, they reduce the stimulus by $5.


"I noticed that the lower the income the less they have to refund from the stimulus money and the higher the income the more is deducted."

I 'm not sure I understand this sentence.