NIH Update: $25K Subaward Threshold and Required Adjustments 

NIH has issued Notice NOT-OD-26-072, which rescinds prior notices and advises that the $25,000 Modified Total Direct Costs (MTDC) threshold for outgoing subawards remains in effect. The previously communicated $50,000 MTDC threshold no longer applies to NIH awards.  

Pre-award: 

  • All NIH proposals should budget subawards using the $25,000 MTDC threshold effective immediately.
  • Rebudget Requests: For new and competing NIH awards issued on or after 7/1/25, your pre-award office will review any subawards set up in the Grants Management Application Suite (GMAS) using the $50,000 threshold and will contact you to address any necessary rebudgeting resulting from the reduction of the MTDC threshold from $50,000 to $25,000.  

Post-award: 

  • For new and competing awards issued on or after 7/1/25 that were set up in GMAS using the $50,000 threshold, we will be reviewing subaward expenses that exceeded $25,000. Your OSP Research Finance contact will reach out to impacted departments to complete required journal entries to move applicable costs from 8190 to 8191.
  • Moving forward, all subaward charges exceeding $25,000 on NIH awards should be directed to 8191.  

Additionally, NOT-OD-26-072 removes the flexibility for subawardees without a negotiated rate to apply the increased 15% de minimis indirect cost rate, limiting them to a 10% indirect cost rate. 

Key Takeaways: 

  • Update proposal budgets immediately to reflect the $25,000 MTDC outgoing subaward threshold for NIH awards only.
  • Use the $25,000 threshold for all NIH subawards.
  • Review active NIH awards with start dates on or after 7/1/25 for potential over collection of indirect costs and work with your Research Finance contact on any adjustments.
  • Continue using the $50,000 threshold for subawards for all other sponsors on new and competing awards issued on or after 7/1/25. 

Questions? 

  • For budgeting, proposal preparation, and rebudgeting questions, please reach out to your pre-award office contact.
  • For post-award questions, please contact your OSP Research Finance contact. 
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