NIH Rescinds Indirect Cost Flexibilities Under 2 CFR 200 for FY2026
Summary
NIH has rescinded two indirect cost flexibilities introduced under NOT-OD-25-059, citing statutory constraints in the Consolidated Appropriations Act for FY 2026 (P.L. 119-75). The rescinded provisions are the Modified Total Direct Cost Definition under 2 CFR 200.1 and the De Minimis Indirect Rate under 2 CFR 200.414(f). These flexibilities will not apply to NIH awards at this time because 45 CFR 75 indirect cost provisions remain controlling by statute.
Institutions receiving NIH grants that had adopted the de minimis indirect rate (10% of modified total direct costs) or were planning to apply the modified total direct cost definition should review their current award budgets. Because NIH will continue to apply 45 CFR 75 indirect cost provisions rather than the updated 2 CFR 200 thresholds, awardees should confirm their negotiated indirect cost rates remain valid and apply the correct rate methodology to active and future NIH awards.
What changed
NIH is rescinding two administrative flexibilities that had been implemented under NOT-OD-25-059: the Modified Total Direct Cost Definition for calculating indirect costs (2 CFR 200.1) and the de minimis indirect rate option (2 CFR 200.414(f)). These flexibilities were authorized by the 2024 revisions to 2 CFR Part 200 but cannot be applied to NIH awards due to the Consolidated Appropriations Act for FY 2026, which preserves the indirect cost provisions of 45 CFR 75 for NIH funding recipients.
Research institutions and universities that had adopted or planned to adopt either the modified total direct cost definition or the de minimis indirect rate for their NIH grants should revert to established indirect cost rates under 45 CFR 75. Award recipients currently using these flexibilities may need to recalculate indirect cost allocations and make corresponding adjustments to their NIH project budgets.
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Update - NIH Implementation of Uniform Administrative Requirements for Federal Financial Assistance Notice Number: NOT-OD-26-072
Key Dates
Release Date: April 20, 2026
Related Announcements
- January 13, 2025. NIH Implementation of Uniform Administrative Requirements for Federal Financial Assistance. See Notice NOT-OD-25-059.
- March 25, 2026. Publication of the Revised NIH Grants Policy Statement (Rev. March 2026) for Fiscal Year 2026. See Notice NOT-OD-26-057.
Issued by
NATIONAL INSTITUTES OF HEALTH (NIH)
Purpose
This Notice updates NIHs implementation of 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The administrative flexibilities and updates outlined in the 2024 revisions to 2 CFR 200 have been incorporated into the FY26 issuance of the NIH Grants Policy Statement that was issued on March 25, 2026 (see NOT-OD-26-057).
However, under the Consolidated Appropriations Act for FY 2026, (P.L. 119-75, Division B, Title II, Sec. 224), the provisions relating to indirect costs in 45 CFR 75 continue to apply to NIH awards. Consistent with the statute, NIH will not apply updated thresholds outlined within 2 CFR Part 200, at this time.
Therefore, the following flexibilities outlined in NOT-OD-25-059 are hereby rescinded.
- 2 CFR 200.1 – Modified Total Direct Cost Definition - Calculating Indirect Costs
- 2 CFR 200.414(f) - De Minimis Indirect Rate
Inquiries
Please direct all inquiries to:
NIH Office of Policy for Extramural Research Administration
Division of Grants Policy
[email protected]
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