FSA contribution limits for 2026

How much can I contribute to an FSA in 2026?

For 2026, the IRS caps employee salary-reduction contributions to a health FSA at $3,400. This is the amount you can elect to have deducted from your paycheck, pre-tax, into the account for the plan year. It is a per-employee limit, not a per-household one: if you and a spouse each have access to your own employer's FSA, you can each contribute up to $3,400 to your own account. The figure comes from the IRS's annual inflation adjustment, released each fall in a Revenue Procedure, and it rises most years by $50 to $150.

What's the FSA carryover limit?

The maximum an employer can let you carry over into the next plan year is $680 for 2026, up from $660 for 2025. Carryover is optional. Your employer's plan document decides whether it exists at all, and if it does, the employer can set a lower cap than the IRS maximum, but not a higher one. Carried-over money does not count against the following year's $3,400 election limit; it sits on top of whatever you contribute fresh.

Do I lose FSA money at year end?

By default, yes. A health FSA runs on a "use it or lose it" rule: money you do not spend on qualified medical expenses by the end of the plan year is forfeited back to the plan, not refunded to you. This is the single biggest difference from a health savings account (HSA), where unused money simply stays yours forever. Many employers soften the FSA deadline with a carryover or a grace period, covered next, but neither is guaranteed. Some plans offer neither, in which case the year-end cutoff is absolute.

Carryover vs grace period: what's the difference?

These are two different ways an employer can extend your deadline, and a plan can only offer one of them, never both.

• Carryover lets you move up to $680 of unspent 2026 money into 2027, where it becomes available on top of whatever you elect to contribute for 2027. There is no new spending deadline attached to it beyond the normal 2027 plan year.
• Grace period gives you an extra two and a half months, typically through March 15, to spend down your entire remaining 2026 balance, with no $680-style dollar cap. But once the grace period ends, whatever is left is gone.

An employer's plan document specifies which one applies, if either. IRS Notice 2013-71 created the carryover option specifically by amending the earlier grace-period rule from Notice 2005-42, and it explicitly bars a plan from adopting both features at once. Check your own plan's summary description rather than assuming; some employers still offer only the grace period, some only carryover, and some neither.

What is a dependent care FSA, and how much can I put in one?

A dependent care FSA is a separate account from a health FSA, funded with its own pre-tax payroll deductions, used to pay for child care, before- and after-school care, or care for an adult dependent so you (and a spouse, if married) can work. It has nothing to do with your own medical costs and runs under a different section of the tax code.

For 2026, the dependent care FSA limit is $7,500 for a single filer or a married couple filing jointly, and $3,750 for a married person filing separately. That is a large jump from the $5,000 limit that had applied since 1986. The increase comes from the One Big Beautiful Bill Act, a 2025 tax law that raised the statutory cap outright, not from the IRS's routine inflation math, which is why it will not move again until Congress changes it a second time.

The carryover option does not apply to dependent care FSAs at all; that provision is written into the tax code for health FSAs only. A dependent care FSA can instead be paired with the same two-and-a-half-month grace period described above, if the employer's plan offers it, but never with a carryover.

FSA vs HSA: which is better?

Neither wins outright; they solve different problems and most people cannot freely choose between them, because eligibility depends on your health plan. An HSA requires a qualifying high-deductible health plan (HDHP) and is yours to keep forever, uncapped rollover included. An FSA has no HDHP requirement, so it pairs with almost any employer health plan, but the money is largely tied to the current plan year.

Source: IRS Rev. Proc. 2025-32 (health FSA), IRS Rev. Proc. 2025-19 (HSA).

If your plan is an HDHP paired with an HSA, see HSA contribution limits for 2026 for the full $4,400 self-only / $8,750 family breakdown and the age-55 catch-up. For a deeper side-by-side on ownership, portability, and whether you can hold both an HSA and a limited-purpose FSA at once, see HSA vs FSA: what's the difference?. And if you are still deciding whether an HDHP is worth choosing in the first place, see Is a high-deductible health plan worth it?.

Worked example: what happens if you don't spend it all

Say you elect the full $3,400 health FSA contribution for 2026 and, by December 31, you have spent $2,900 on copays, prescriptions, and a dental procedure, leaving $500 unspent.

• If your plan offers carryover: all $500 rolls into 2027, since it is under the $680 cap. It is added to whatever you elect for 2027, with no new deadline attached.
• If your plan offers a grace period instead: you have until roughly March 15, 2027 to spend that $500 on 2026-eligible expenses. Spend it in time and you keep it; miss the date and it is forfeited.
• If your plan offers neither: the $500 is forfeited to the plan on December 31, no exceptions.

Compare that to an HSA: if you had put $500 of unspent money into an HSA instead, it would simply still be there next year, and the year after that, with no election, deadline, or forfeiture risk at all.

The flat truth: an FSA is a use-it-by-deadline account, not a savings account

Treat an FSA election as a bet on what you will actually spend in the coming year, not as money you are setting aside indefinitely. The $3,400 limit and the $680 carryover cushion are real, but they do not change the core deal: an FSA is your employer's account, on your employer's clock, and the default outcome for anything left over is that you lose it. If you want money that is unconditionally yours and grows without a deadline, that is what an HSA is for, and it requires an HDHP to get one. Elect only what you are confident you will spend, check whether your plan offers carryover or a grace period before you assume either exists, and treat the dependent care FSA's new $7,500 limit as a separate pool with its own math, not an add-on to your health FSA.