FSA Rollover for 2026: How Much Carries Over, Who Allows It and What You Lose

• The maximum health FSA carryover for a plan year that begins in 2026 is $680, and the 2026 health FSA salary reduction limit is $3,400 (IRS Revenue Procedure 2025-32, 2025).
• Carryover is optional. A cafeteria plan has to be amended to allow it, and the amendment must be adopted on or before the last day of the plan year the money comes from (IRS Notice 2013-71, 2013).
• A plan that allows carryover is not permitted to also offer a grace period, so an employee gets one safety net or the other, never both (IRS Notice 2013-71, 2013).
• Carryover applies to health FSAs. A dependent care assistance program has a separate 2026 exclusion of up to $7,500, or $3,750 if married filing separately (IRS Publication 15-B, 2026).
• A general purpose health FSA generally blocks HSA contributions, while a limited-purpose FSA does not (IRS Publication 969, retrieved September 2026).

It is the fall, your FSA still has money in it, and you cannot tell whether it rolls over or disappears. The answer is set by your employer's plan, not by a single national rule. This guide explains the $680 carryover cap, how it differs from a grace period, what happens to the money you do not use, and how to get a straight answer from HR before the plan year ends.

Reviewed by a licensed benefits professional. Last reviewed: September 29, 2026.

Does an FSA roll over to the next year?

A health FSA rolls over only when the employer has amended its cafeteria plan to allow carryover. By default, the IRS use-or-lose rule applies, and unused balances are forfeited at the end of the plan year. IRS Publication 15-B (2026) says an employer may, instead of a grace period, amend the cafeteria plan to let unused contributions carry over to the immediately following plan year. The employer decides whether to offer it, and can set a lower cap than the IRS maximum.

The IRS allows three outcomes for unused health FSA money. Your plan uses exactly one of them.

A run-out period is a different thing. It is the window your plan gives you to submit claims for expenses you already had during the plan year. It does not give you more time to spend money. The plan document sets the run-out deadline, so check it.

How much can you roll over in an FSA in 2026?

The most a health FSA can carry over from a plan year that begins in 2026 is $680, according to IRS Revenue Procedure 2025-32. Your plan can allow less than $680 or nothing at all.

The carryover does not count against your next year's election limit. IRS Notice 2013-71 says carried-over money does not affect the maximum salary reduction contribution. For plan years beginning in 2026, that maximum is $3,400 (IRS Revenue Procedure 2025-32).

Here is how the $680 cap works in four cases. The numbers are examples, not your plan.

In the third row, you put $3,400 into the account and spent $2,500. That leaves $900 unused. Only $680 can move forward, so $220 is lost. If the same plan had no carryover, the whole $900 would be lost.

What is the difference between FSA carryover and a grace period?

Carryover moves a dollar amount into the next plan year, while a grace period gives you extra days to spend the old balance. Both exist to soften the use-or-lose rule. IRS Notice 2013-71 says a plan that adopts carryover "is not permitted to also provide a grace period."

The difference shows up in how you plan your spending. With carryover, you can hold up to $680 back and still have it in the new year. With a grace period, you have to spend the whole balance in the extra 2 months and 15 days, and anything left after that is lost.

A carryover also needs paperwork. The employer must amend the cafeteria plan to include it, and IRS Notice 2013-71 says the amendment must be adopted on or before the last day of the plan year the money comes from. For a calendar-year plan, that means an employer has until December 31, 2026 to add carryover to a 2026 plan. If your employer has not done it by then, the 2026 balance follows the old rule.

Does a dependent care FSA roll over?

A dependent care FSA does not use the health FSA carryover rule. The carryover in IRS Notice 2013-71 covers unused amounts in a health FSA, not dependent care assistance. Your dependent care plan follows its own written program, so read that plan document before you assume anything.

The 2026 dependent care limit changed. IRS Publication 15-B (2026) says an employee can generally exclude up to $7,500 of dependent care assistance each year, or $3,750 if married filing separately. Some older guides still show the earlier limit. Benecor's dependent care FSA limit guide→ covers the new number and who qualifies.

What happens to FSA money you do not use?

Unused health FSA money that does not carry over or fall inside a grace period is forfeited, which means you lose it. It does not come back to you as a refund or a tax credit. The pre-tax savings you already received do not get reversed, but the dollars themselves are gone.

Three habits protect your balance:

1. Check your balance now. Log in to your FSA portal and note the amount left and the plan year end date.
2. List what you can buy. Eligible items include copays, prescriptions and many over-the-counter products. Your plan's eligible expense list is the final word.
3. Submit claims early. Ask when the run-out period ends and file well before it.

Benecor's 2026 FSA contribution limits guide→ has the full list of limits and rules by account type.

How do you find out if your employer allows FSA carryover?

You find out by asking HR for the cafeteria plan document and the summary plan description. Both should say whether the plan offers carryover, a grace period or neither, and what the run-out deadline is. Your FSA administrator's website or benefits guide often repeats the rule, but the plan document is the source that controls.

If HR says the plan has no carryover and no grace period, spend the balance before the plan year ends and file claims before the run-out date. If HR says a carryover is planned but not yet adopted, ask when the amendment will be signed. IRS Notice 2013-71 requires it by the last day of the plan year.

Does FSA carryover affect your HSA?

A general purpose health FSA generally blocks HSA contributions. IRS Publication 969 says an employee covered by a high deductible health plan and a health FSA that pays or reimburses qualified medical expenses generally cannot contribute to an HSA. A limited-purpose health FSA, which is restricted to items such as dental and vision, is treated differently.

Publication 969 also says a general purpose health FSA in a grace period is allowed if the balance at the end of the prior plan year is zero. If you use both accounts, ask HR which kind of FSA you have before you make an HSA contribution. Benecor's guide to the HSA and Section 125 cafeteria plan→ explains how the two accounts work together.

For employer-side rules on the same choice, Summit Health Benefits explains FSA grace period versus carryover rules for employers↗.

Sources: IRS Revenue Procedure 2025-32 (2025), 2026 health FSA limit of $3,400 and maximum carryover of $680; IRS Notice 2013-71 (2013), health FSA carryover rules and plan amendment deadline; IRS Publication 15-B, Employer's Tax Guide to Fringe Benefits (2026), use-or-lose rule and dependent care exclusion; IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans (retrieved September 2026), HSA eligibility and health FSAs; Proposed Treasury Regulation Section 1.125-1(e), grace period; 26 CFR 1.125-4 (2026), permitted election changes.