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Program income is gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award.
Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under federally funded projects, the sale of commodities or items fabricated under an award, license fees and royalties on patents and copyrights, and interest on loans made with award funds.
For federal awards, program income is to be identified by the recipient and handled in one of three ways:
- added to available funds and used for program objectives
- used to finance the non-federal share of the project
- deducted from the new allowable federal costs of the program
Except for research awards, alternative 3 applies unless the awarding agency specifies to the contrary in its regulations or in the award. Alternative 1 applies to research awards by default unless the awarding agency specifies another alternative.
Interest earned on advances of federal funds is not program income. Except as otherwise provided in federal awarding agency regulations or the terms and conditions of the award, program income does not include the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them.
For more details on program income, please refer to OMB Circular A-110.
For non-federal awards, stipulations around program income should be addressed in the sponsor's terms and conditions or by contacting the sponsor through your pre-award representative.
