What Program Income Means for AmeriCorps Grants

Classification is one question. What you do with the money is another.

Money lands in your account. A school district pays a placement fee. Someone registers for a training your grant-funded staff delivered. A partner reimburses you for materials.

The question in the room is usually "can we keep this?" That's the wrong first question, and it's why these files go sideways.

Work it in this order: classify it, find the authorized treatment, apply it the way that treatment requires, then document the trail. Classifying a receipt as program income tells you nothing on its own about how you may use it. The treatment comes from your award terms.

For AmeriCorps recipients, that distinction matters more than usual, because the AmeriCorps award terms say something more specific than the federal default does.

What program income is

Program income is gross income your organization earns that's directly generated by a supported activity, or earned as a result of the federal award, during the period of performance. That definition lives in 2 CFR § 200.1, and the treatment framework lives in 2 CFR § 200.307.

Three phrases carry the weight: directly generated, earned as a result of the federal award, during the period of performance.

The definition also lists what's out. Rebates, credits, discounts, and interest earned on advances of federal funds aren't program income. Interest on advances is handled in 2 CFR § 200.305, and applicable credits — refunds, rebates, discounts — in 2 CFR § 200.406.

Donations ordinarily aren't program income either. A foundation gift isn't a fee. If you want to count a gift toward your share, that's a separate analysis under the cost-sharing standards in 2 CFR § 200.306.

The test that settles most of it: would this money have been earned in this form, at this time, without the federally supported activity? If no, treat it as a program income question.

What the federal framework says, and what your AmeriCorps terms say

2 CFR § 200.307 describes three treatments and sets the default when nothing else speaks.

Treatment	What it does	When it applies
Deduction	Program income is deducted from total allowable costs to determine net allowable costs	The federal default, unless the agency's regulations or the award terms say otherwise
Addition	Program income is added to the award, so the funds available for the project grow	Only with prior approval of the federal awarding agency
Cost sharing or matching	Program income is applied toward the non-federal share	Only where the agency's regulations or the award terms authorize it

That's the frame. It isn't your instruction.

Your instruction, if you hold an AmeriCorps State and National award, is Section XIII of the FY2026 AmeriCorps State and National Terms and Conditions. It's short, and it's specific:

• XIII.A. Income, including fees for service earned as a direct result of the award-funded program activities during the award period, must be retained by the recipient and used to finance the award's non-AmeriCorps share.
• XIII.B. Program income earned in excess of the amount needed to finance the recipient share follows 2 CFR part 200 and is deducted from total claimed costs. Recipients that earn excess income must specify the amount of the excess in the comment box on the financial report.

Read that against the table above and you'll see why the federal default alone gives the wrong answer for an AmeriCorps program. AmeriCorps doesn't leave you at plain deduction from dollar one. Your terms direct the income at the non-AmeriCorps share first, and only the excess gets deducted from claimed costs.

Cite § 200.307 for the framework. Cite your award terms for what you have to do.

Two cautions. This is the FY2026 language; the Terms are reissued every award year and were already revised once in FY2026, so if you're operating on a prior-year award, follow the Terms attached to that award. And these are the State and National Terms — commission grants read differently, which is the next section.

Fees you may not accept at all

Before treatment, there's a prohibition worth knowing. Under XIII.C of the FY2026 ASN Terms, a recipient may not enter into a contract for, or accept, fees for service performed by members when the service benefits a for-profit entity, when it falls within the prohibited activities in the award provisions, or when it violates 42 U.S.C. § 12637, the nonduplication and nondisplacement statute.

That's a classification question you answer before you ever get to treatment. If the fee shouldn't have been accepted, no accounting method fixes it.

Host-site and service-site fees

This is the receipt that generates the most email.

Say you place members at ten sites and each site pays $5,000 per member — $50,000 in total. Is that program income, or is it cash match?

Look at what the payment buys.

If the site is paying for a service your program delivers — a defined deliverable, priced, invoiced, and provided because the grant-funded activity exists — that's a fee for service. Under XIII.A of the FY2026 ASN Terms, that $50,000 is retained and used to finance the non-AmeriCorps share of the award.

If the site is making a contribution toward the cost of the program with no service purchased in return, it's a cash contribution, and it's evaluated as match under 2 CFR § 200.306.

Here's the practical relief: on an ASN award, both roads often end at the same column of your budget. Program income is directed at the non-AmeriCorps share, and cash match sits in the non-AmeriCorps share. What changes is the paperwork — how you describe it, where it's reported, and what happens if you earn more than your share requires. Excess program income has a rule; excess cash match doesn't work the same way.

What you may never do is count the same $5,000 twice — once as program income financing your share, again as a separate cash match contribution. Same dollar, one job.

Read the site agreement, not the budget line. The agreement tells you what was purchased.

The timing rule people skip

Classification and treatment aren't the end. There's a sequencing obligation.

Under 2 CFR § 200.305(b)(5), you must disburse funds available from program income, rebates, refunds, contract settlements, audit recoveries, and interest earned on those funds before requesting additional cash payments. Program income sitting in your account while you draw down federal cash is a finding waiting to happen, even when your classification was perfect.

Spend it, then draw.

If you hold a fixed amount award

Fixed amount awards work differently, and FY2026 changed something here.

A fixed amount award pays a specific amount without regard to actual costs incurred (2 CFR § 200.1), and per XVII of the FY2026 ASN Terms, that includes Education Award Program, Professional Corps, and full-cost fixed amount awards. The revised FY2026 Terms removed the requirement for fixed amount recipients to report excess program income to AmeriCorps, citing the authority in 2 CFR § 200.201.

If your program is on a fixed amount award, don't carry over a cost-reimbursement habit here. Check your own award document, and check the change log at the front of your Terms.

Commission grants read differently

If your award is a Commission Support Grant or a Commission Investment Fund grant, don't borrow the ASN language.

Under Section VIII of the FY2026 Commission Support Grant Terms and Conditions, program income is retained and used to finance the grant's non-AmeriCorps share; income earned in excess of the recipient share is deducted from total claimed costs or, with approval from AmeriCorps through a budget amendment, used to enhance the program — the additive process. Unexpended program income is reported on line "O" of the Federal Financial Report.

That's the one place in this family of awards where addition is written into the terms, and it still requires AmeriCorps approval through a budget amendment. It is not a menu choice.

Under Section VIII of the FY2026 Commission Investment Fund Terms and Conditions, the rule is shorter: income is retained by the grantee, deducted from total claimed costs, and noted on the Federal Financial Report. No non-AmeriCorps-share step.

Three award types, three different sentences. That's why "what does AmeriCorps do with program income" doesn't have one answer.