FSA Deadline 2026: Use-It-or-Lose-It Rules, the $680 Carryover and Grace Period

A health flexible spending arrangement (FSA) is generally a use-it-or-lose-it plan, according to Internal Revenue Service (IRS) Publication 969, and the 2026 limit on employee contributions is $3,400. The IRS sets the cap in Rev. Proc. 2025-32, section 4.15. A plan may let you keep up to $680 into the next year (carryover) or give you extra time to spend the money (grace period), but only if the plan itself provides one. This story covers health FSAs. Dependent care FSAs follow different rules, noted at the end.

Health FSA rules for 2026 at a glance

Rule	2026	Source
Health FSA contribution limit	$3,400 (up $100 from $3,300 in 2025)	IRS news release IR-2025-103, Oct. 9, 2025
Maximum carryover, if the plan allows	$680 (2025: $660)	Rev. Proc. 2025-32
Grace period, if the plan allows	Up to 2½ months after the plan year ends	IRS Publication 969
Carryover and grace period together	Not permitted for health FSAs	IRS Publication 969
2027 limit	Not yet announced by the IRS as of Oct. 30, 2026

The $3,400 limit applies to taxable years beginning in 2026, and the $680 carryover figure applies when the cafeteria plan permits carryover. The 2025 values of $3,300 and $660 come from Publication 969.

What happens to unused health FSA money?

Publication 969 calls FSAs generally “use-it-or-lose-it” plans. Money left over beyond what your plan lets you carry over or spend in a grace period is forfeited. Your employer chooses which option, if any, the plan offers, and may set a carryover below the IRS maximum.

Carryover, grace period or neither: which applies to your plan?

A plan can have one of the two features, or neither. The plan year is not always the calendar year, so confirm your own end date first.

If your plan has	What it allows	Example for a plan year ending Thu., Dec. 31, 2026
Carryover	Up to $680 moves into the 2027 plan year; the employer may set a lower amount	Spend the rest by Dec. 31, 2026
Grace period	Up to 2½ months after the plan year ends to use the money	Mon., Mar. 15, 2027 at the latest
Neither	Nothing carries over	Spend it all by Dec. 31, 2026

The March 15 date is the longest a 2½-month grace period can run from December 31. A plan may set a shorter one. Mark the dates on a December 2026 printable calendar and a March 2027 printable calendar, or use the printable yearly calendar.

How do I check my plan?

Start with the benefits portal, then the Summary Plan Description, HR or the plan administrator. Ask:

1. What is my plan year end date?
2. Does the plan have a carryover, a grace period or neither?
3. If there is a carryover, is it the full $680 or a lower amount?
4. What is my current balance?
5. What is the deadline to submit claims?

On the last question, the IRS pages used here do not set a claims deadline. Your plan sets it, so ask the administrator.

Can I contribute to a health savings account with an FSA?

Publication 969 says an employee covered by a health FSA generally cannot make contributions to a health savings account (HSA), with exceptions such as a limited-purpose FSA. The HSA has its own timing; see the HSA contribution deadline for 2026 in April 2027. The rules differ from FSA rules.

What is different for a dependent care FSA?

Dependent care FSAs have their own limit. According to IRS Publication 15-B (2026), for the 2026 tax year the annual dependent care FSA limit was raised from $5,000 to $7,500 ($3,750 for married filing separately). The carryover and grace period figures above are for health FSAs.

Federal employees choosing benefits for 2027 can see the federal benefits open season dates.