Information for NIH Inventors
INVENTOR ROYALTIES
When are royalty payments made to inventors?
What do the payments represent?
How are the royalty payments calculated?
How are the payments made to inventors?
How do I know when i will be receiving a royalty payment?
What do I do if I move or need to update my contact information?
Is there a preferred method of inventor payment?
What do I do if I change financial institutions and/or change my bank account?
How do I send my ACH form securely and confidentially over an SSL/encrypted connection?
How do I identify a deposit in my bank account as a royalty payment?
Are taxes withheld from the royalty payments?
Will I receive a tax statement for royalty payments?
Who do I contact if I didn't receive the Form 1099-MISC or think it contains an error?
If I received a check, and don´t cash it, what happens? Maybe I lost it, or misplaced it in my home.
Whom should I contact when I have questions?
DECEASED INVENTOR ESTATE DISTRIBUTIONS
Are royalties distributed to the estate of a deceased inventor?
Answers
When are royalty payments made to inventors?
Royalty payments to inventors are processed two times in the calendar year. The first payment is generally made from late May to late June. The second payment is generally made from late October to late November. Payments cannot be distributed to inventors until the royalty information is completely reconciled to ensure accurate payouts.
What do the payments represent?
The payments represent the inventor's share of royalty payments from licensees to the NIH during the fiscal year. For example, the first inventor payment is based on money received by the NIH for the period of October 1 through March 31. The second inventor payment is based on money received by the NIH for the period of April 1 through September 30.
How are the royalty payments calculated?
Inventors receive the first $2,000 collected from a licensee. Next, they receive 15 percent of royalties above $2,000 and up to $50,000. Finally, they receive 25 percent of royalties in excess of the first $50,000 collected each year. Each inventor cannot receive more than $150,000 in royalty payments for a calendar year.
How are the payments made to inventors?
The payments are made by either direct deposit to the inventor's financial institution or by check.
How do I know when I will be receiving a royalty payment?
The Office of Financial Management sends out e-mails to inventors a couple of weeks in advance of the bi-annual payouts providing the amount of royalties to be sent and giving you an opportunity to update your banking information if needed.
Please Note: It is important to make sure that OFM has your current e-mail address.
What do I do if I move or need to update my contact information?
If you move, contact the Office of Financial Management (OFM) at OFMRoyalty@mail.nih.gov and the NIH Office of Technology Transfer at OTT-Royalties@mail.nih.gov. Provide both offices with your updated contact information.
Please Note: It is recommended that you provide your personal contact information (including your personal e-mail address), because that typically does not change when you retire, change positions, or relocate.
Is there a preferred method of inventor payment?
All payments should be made by direct deposit.
In order to ensure that inventor royalty income is deposited into the correct account, inventors are required to complete the ACH VENDOR/MISCELLANEOUS PAYMENT ENROLLMENT FORM and return it by e-mail to the NIH Office of Financial Management (OFM).
For inventors with a non U.S. Bank Account, please use this International Wire Transfer Form.
E-mail: OFMRoyalty@mail.nih.gov
Please Note: You do not need to complete the ACH Coordinator information from your bank if you do not need their assistance completing the form.
Please Note: Due to COVID-19 concerns, OFM staff are no longer receiving ACH forms by USPS mail.
Please Note: It is recommended that you provide your personal contact information (including your personal e-mail address), because that typically does not change when you retire, change positions, or relocate.
Please Note: Anyone sending Personally Identifiable Information (PII) NIH/OFM should send it securely and confidentially over an SSL/encrypted connection.
What do I do if I change financial institutions and/or change my bank account?
If you change your financial institution or bank account, complete the ACH VENDOR/MISCELLANEOUS PAYMENT ENROLLMENT FORM and return it by e-mail to the NIH Office of Financial Management (OFM).
For inventors with a non U.S. Bank Account, please use this International Wire Transfer Form.
E-mail: OFMRoyalty@mail.nih.gov
Please Note: You do not need to complete the ACH Coordinator information from your bank if you do not need their assistance completing the form.
Please Note: Due to COVID-19 concerns, OFM staff are no longer receiving ACH forms by USPS mail.
Please Note: It is recommended that you provide your personal contact information (including your personal e-mail address), because that typically does not change when you retire, change positions, or relocate.
Please Note: Anyone sending Personally Identifiable Information (PII) NIH/OFM should send it securely and confidentially over an SSL/encrypted connection.
How do I send my ACH form securely and confidentially over an SSL/encrypted connection?
Current NIH Employees can send information to OFM from their NIH E-Mail Account. Select "New Email", when it opens, select “Options”, “Encrypt” and then “National Institutes of Health – Confidential”.
If you no longer work at the NIH or want to send the information from your personal e-mail account, send a request to the Office of Financial Management at OFMRoyalty@mail.nih.gov and request that they send you an e-mail through the NIH Secure and File Transfer Service. You will receive an encrypted e-mail and can respond to that e-mail and send back your information encrypted.
How do I identify a deposit in my bank account as a royalty payment?
Royalty payment transactions sent from the NIH to the U.S. Treasury include the words ROYALTY PAYMENT. When the Treasury sends this information to your financial institution, the ROYALTY PAYMENT identification is included with the direct deposit transaction. Most institutions include this information on your monthly account statement. However, some institutions do not interpret or provide the payment description. Others choose not to provide the description. If the deposit identification does not appear on your statement, you should discuss this matter with your financial institution.
Are taxes withheld from the royalty payments?
The answer is no.
Will I receive a tax statement for royalty payments?
If you receive royalty payments of $10.00 or more in the calendar year, you will receive Form 1099-MISC Miscellaneous Income. Payments for less than $10.00 are taxable, but Form 1099-MISC will not be issued. Historically, the Form 1099-MISC is sent to inventor by the end of January.
Who do I contact if I didn't receive the Form 1099-MISC or think it contains an error?
Send an inquiry to the Office of Financial Management by e-mail to: OFMRoyalty@mail.nih.gov
If I received a check, and don't cash it, what happens? Maybe I lost it, or misplaced it in my home.
The U. S. Treasury automatically cancels checks that are not cashed after one year from issuance. When this occurs, funds are returned to the issuing agency. Once returned, the NIH has less than four years to reissue these amounts.
Whom should I contact when I have questions?
Payments: If you have a question about a royalty payment you have received, contact the OFM by e-mail.
Estate or Probate Issues: If you are the Personal Representative of an Inventors Estate contact Kevin Doran, the Senior Royalties Administrator at 301-435-0892, or by e-mail.
Technology Transfer Matters: For questions concerning technology transfer matters, inventors should contact their Institute Technology Development Coordinator. A list of current Technology Development Coordinators can be found here.
Are royalties distributed to the estate of a deceased inventor?
Yes, royalties will continue if an inventor is deceased. The payments will be issued "To The Estate of ...." and forwarded to the bank account or address on record with the Office of Financial Management. The Personal Representative for the Estate should contact Kevin Doran, the Senior Royalties Administrator at 301-435-0892, or by e-mail, for assistance regarding probate issues and disposition of future royalties to estate heirs. She will coordinate interactions with the Office of Technology Transfer, Office of Financial Management and the Office of General Counsel.