Proposals submitted to Sponsored Program Services must use the appropriate indirect cost rate in accordance with the most recently negotiated rate agreement and University policy.

The University’s Indirect Cost Rate Agreement, negotiated with the Department of Health and Human Services and dated 9/27/24: Indirect Cost Rate Agreement.

• Proposals submitted to Sponsored Programs Services (SPS) on or before 1/1/25 may be submitted using the former Indirect Cost Rates
• Proposals submitted to SPS after 1/1/25 must be budgeted in accordance with the new rates, using the rate effective at the beginning of each proposed budget period
• UConn’s Modified Total Direct Cost (MTDC) base has been updated to raise the threshold for inclusion of subaward dollars from $25,000 to $50,000, effective 7/1/25. As a result, the first $50,000 of the total amount of each subaward budgeted for inclusion after 7/1/25 should be included in the base when calculating indirect costs using an MTDC base.
• Current awards will continue to utilize the IDC rate in effect at the time of the initial award
• New awards may continue to use the proposed rate (if lower), if allowed by the sponsor

Federal & Corporate Rates

	Rate Base*	FY24 07/01/23 – 06/30/24	FY25 07/01/24 – 06/30/25	FY26-27 07/01/25 – 06/30/27	FY28 07/01/27 – 06/30/28	FY29+ 07/01/28 Until Amended
Research
On Campus	MTDC	61.0%	61.0%	62.5%	63.5%	63.5%
Off Campus(2)	MTDC	26.0%	26.0%	26.0%	26.0%	26.0%
Instruction
On Campus	MTDC	57.0%	57.0%	57.0%	57.0%	57.0%
Off Campus(2)	MTDC	26.0%	26.0%	26.0%	26.0%	26.0%
Other Sponsored Activities
On Campus	MTDC	35.0%	35.0%	37.0%	37.0%	37.0%
Off Campus(2)	MTDC	26.0%	26.0%	26.0%	26.0%	26.0%

*Indirect costs are calculated on Modified Total Direct Cost (MTDC) which is Direct Costs minus certain exclusions. Direct Costs include salary, fringe benefits, materials and supplies, travel, and the first $50,000 of each subcontract (after 7/1/25).

Exclusions include equipment over $5,000**, rent, fellowships, tuition, participant support costs and subcontract amounts beyond the first $50,000 for each subcontract (after 7/1/25).

**In order to be consistent with State classification standards, the dollar threshold for capitalization of equipment at UConn is $5,000.

Off Campus Rate

In accordance with our current Indirect Cost Rate Agreement:

For all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project(s), the off campus rate will apply. Grants or contracts will not be subject to more than one indirect cost rate.  If more than 50% of a project is performed off campus, the off campus rate will apply to the entire project.

The off campus indirect cost rate can be budgeted as follows:

• If rent is directly charged to the project.
• If more than 50% of all program activities are performed off campus.   (We request written confirmation from the PI).
• If the sponsor specifically requires the off-campus rate per the solicitation.

The on-campus rate is normally applied whenever the University leases or pays for space costs that are not direct charged to a grant or contract.

If you have questions, please contact your SPS Grants/Contracts Specialist.

Sponsor-Stated Limits

When the University collects indirect costs at less than the full federally negotiated rates,  indirect costs are charged to Total Direct Costs (including equipment, participant support costs, subcontracts, etc.,)  unless otherwise stated in the sponsor guidelines.

Funding from Connecticut State agency appropriations and local municipalities are charged a current reduced rate of 20%.  Indirect costs should be charged to Total Direct Costs.  If the Originating Sponsor is non-State, the full rate allowable by the originating/prime sponsor should be applied.

Reduction of F&A on Projects Having a Total Cost of $50k or Less

To allow for more buying power on small sponsored projects and to help foster smaller awards which may lead to additional funding, indirect costs on new awards received after October 1, 2017 with total costs of $50,000 or less, will be reduced to 20% or the difference between the full indirect cost rate and 20% will be distributed to the investigators indirect cost account.  Indirect costs are charged to Total Direct Costs (TDC) or Modified Total Direct Costs (MTDC),  as required by the specific sponsor or solicitation.

Sponsored Program Services (SPS) has developed guidance and FAQs on how this program is implemented.