Blog
May 13, 2026
NIH Rescission Notice NOT-OD-26-72
On April 20, 2026, the National Institutes of Health (NIH) notice NOT-OD-26-72 rescinds two important flexibilities allowed in the 2024 Uniform Guidance revisions. The flexibilities were effective for awards starting on or after October 1, 2024; and were effectively implemented by NIH on October 1, 2024 (NOT-OD-25-059).
- The subaward threshold up to $50,000, reverting back to $25,000
- The 15% de minimis rate, reverting back to 10%
NIH cited the provisions in the Consolidated Appropriations Act for FY 2026 (P.L. 119.75, Division B, Title II, SEC.224)1 as the justification for the rescission. The specific provision in SEC.224 requires NIH not to change its indirect cost practice and system in place as of 2017. The revised NIH Grants Policy Statement issued in March 2026 reflects the lower threshold for subawards and the lower rate for the de minimis rate.
Impact on Grantees
- The change is effective immediately and affects all current NIH grants.
- Even with an approved rate agreement with a definition of subaward at $50,000 for the MTDC (modified total direct costs), an organization can only apply the indirect cost rate on the first $25,000 for NIH awards.
- Adjustments of costs may be required if the higher threshold has been used on NIH awards.
- Current and future proposals to NIH must use the $25,000 threshold to calculate the total budget.
- Other Federal agencies are not affected, and the higher threshold is allowed (as long as it is reflected in the negotiated rate agreement).
- Organizations may require new accounting settings and controls for the two levels of subaward thresholds ($25,000 for NIH and $50,000 for other agencies).
- Non-action for compliance may result in audit findings.
Considerations
- This rescission will lower indirect costs recovery on NIH subawards above $25,000.
- If your organization has substantial subaward amounts on NIH awards, consider computing and negotiating two different rates: an NIH-specific rate and a regular rate for other federal agencies.
- You may still propose the higher subaward threshold during the indirect cost rate negotiations with the federal cognizant agencies for indirect costs. However, for recovery, the approved rate can only be applied to the first $25,000 of the subaward on NIH-funded projects.
Additional Notes
- NIH has rescinded the 15% de minimis rate, reverting back to 10%. Your subwardees may need to submit revised cost reports, refunds, and revised proposal budgets using the lower rate.
- The equipment threshold remains at $10,000.
We are continuing to monitor for any additional clarification from NIH, including applicability to existing awards and effective date specifics.
Please feel free to reach out if you would like to discuss how this may impact your institution or if you need assistance evaluating next steps.
About the Author
Gil Tran is Senior Specialist Leader, Grants Management at Attain Partners. Previously, he served as a Senior Policy Analyst with the Office of Management and Budget (OMB), Office of Federal Financial Management (OFFM).
A 27-year veteran of OMB, Gil has often served as a go-to field expert and is a sought-after presenter who has earned a reputation as a source of knowledge and an engaging industry speaker. Among his contributions in shaping the financial assistance landscape for future generations are: helping reduce the audit burden for both auditees and federal government oversight agencies; playing an integral role in the development of the Uniform Grant Guidance (UGG) and consolidating cost principles in the guidance; and, in 2005, leading the development of the first-ever government-wide waiver to provide relief to grantees caused by natural disasters.
Gil’s professional contributions have been recognized with several awards, including the OMB Robert Damus Award, the National Grants Management Association (NGMA) Newton Award, and the Association of Government Accountants (AGA) Frank Greathouse Distinguished Leadership Award—all in 2022—as well as the National College and University Research Administrators Association (NCURA) Joseph F. Carrabino Award in 2015. He is widely recognized as an outstanding leader in the grants management field. Gil received a Bachelor of Science degree in accounting from George Mason University, Virginia. He is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. Additionally, he chaired the Diversity Committee for the U.S. Tennis Association (Mid–Atlantic Section).
[1] SEC. 224. In making Federal financial assistance, the provisions relating to indirect costs in part 75 of title 45, Code of Federal Regulations, including with respect to the approval of deviations from negotiated rates, shall continue to apply to the National Institutes of Health to the same extent and in the same manner as such provisions were applied in the third quarter of fiscal year 2017.
Indirect Cost Rate Policy Updates and Guidance
With decades of experience in the research ecosystem, Attain Partners is ready to help your institution navigate these changes.
