Understanding Program Income: Legal Definitions and Implications

Q: How is program income reported?

Organizations must report program income according to the terms of their federal award and relevant regulations.

Q: Can program income be used for other purposes?

Generally, program income must be used in accordance with the terms of the federal award.

Definition & Meaning

Program income refers to the gross income earned by an organization that is directly generated from activities supported by federal funding or earned as a result of a federal award. This income can come from various sources, including:

Fees for services performed
Rental income from real or personal property acquired under federally-funded projects
Sales of commodities or items produced under a federal award
License fees and royalties on patents and copyrights
Interest on loans made with award funds

However, it is important to note that interest earned on advances of federal funds is not considered program income. Additionally, program income does not include principal repayments on loans, rebates, credits, discounts, or the interest earned on these items.

Table of content

Legal Use & context

Program income is primarily relevant in the context of federal grants and funding agreements. It is often encountered in sectors such as education, healthcare, and non-profit organizations. Understanding program income is crucial for compliance with federal regulations, as it can affect the financial reporting and use of grant funds.

Organizations may need to manage program income through specific forms and procedures, which can be facilitated by using legal templates from US Legal Forms, drafted by qualified attorneys.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: A university receives a federal grant to conduct research. The university charges fees for workshops related to the research, generating program income from these fees.

Example 2: A non-profit organization acquires a building with federal funds and rents out part of the space to generate income, which is classified as program income. (hypothetical example)

Relevant laws & statutes

Pursuant to 49 CFR 19.2, program income is defined and regulated under federal guidelines for grants and agreements. This regulation establishes the framework for how program income is treated and reported.

Comparison with related terms

Term	Definition	Key Differences
Grant Funds	Money provided by a government or organization for a specific purpose.	Program income is generated from activities funded by grants, while grant funds are the initial financial support.
Revenue	Income generated from business activities.	Program income is specifically tied to federally funded projects, whereas revenue can come from any business activity.

Common misunderstandings

What to do if this term applies to you

If you are managing a project funded by federal grants and generating program income, ensure you:

Understand the specific regulations regarding program income.
Keep accurate records of all income generated.
Consult legal templates from US Legal Forms to assist with compliance and reporting.
Seek professional legal advice if you're unsure about your obligations.

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Quick facts

Attribute	Details
Definition	Gross income earned from activities supported by federal funding.
Common Sources	Fees, rentals, sales, royalties, and interest on loans.
Exclusions	Interest on advances, principal repayments, rebates, credits.

Key takeaways

Frequently asked questions

What is program income?

Program income is the gross income earned from activities that are supported by federal funding.