FSA Contribution Limits for 2026

The health FSA salary-reduction limit is $3,400 per employee for 2026 (IRS Rev. Proc. 2025-32, §4.15), up from $3,300 in 2025. This limit is per employee, not per household — a married couple with FSAs at two different employers can each contribute up to $3,400.

$7,500 for single filers, married filing jointly, and head of household, or $3,750 if married filing separately — a large jump from the $5,000 / $2,500 that applied in 2025 and most years since 1986. OBBBA §70404 (P.L. 119-21, amending IRC §129(a)(2)(A)) is the first PERMANENT increase to the statutory cap in four decades, effective for plan years beginning in 2026 (the only prior change was a one-year, pandemic-era increase for 2021 under IRS Notice 2021-26 and ARPA §9632, which then reverted). Unlike the health FSA limit above, this figure is a fixed dollar amount set by statute — it does not adjust for inflation and stays at $7,500 until Congress legislates another change.

Carryover lets you roll a limited amount of unused health FSA funds into the next plan year instead of forfeiting them. For 2026, the maximum carryover is $680 (IRS Rev. Proc. 2025-32, §4.15), up from $660 in 2025 — it's inflation-indexed, like the health FSA limit itself. Carryover is optional: your employer's plan must specifically adopt it (per IRS Notice 2013-71), and not every plan does.

A grace period gives you up to an extra 2 months and 15 days after the plan year ends to incur new expenses against last year's remaining balance (established by IRS Notice 2005-42). It's an alternative to carryover, not an addition to it — per IRS Notice 2013-71, a health FSA plan may offer a carryover OR a grace period, but never both in the same plan year. Check your plan documents or ask HR which one (if either) your employer offers; many offer neither, in which case the strict use-it-or-lose-it rule applies with no grace at all.

It's forfeited — this is the "use-it-or-lose-it" rule that has applied to health FSAs since they were created. Unlike an HSA, a health FSA balance does not roll over indefinitely and never earns investment growth. This is the central tradeoff against an HSA: FSA funds are available in full on day one of the plan year (regardless of how much you've actually contributed so far), but unspent money is generally lost at year-end unless your plan adopts carryover or a grace period.

Generally no — health FSA elections are locked in for the plan year once open enrollment closes, under the IRC §125 "cafeteria plan" rules. The exceptions are IRS-defined qualifying life events: marriage, divorce, birth or adoption of a child, a spouse's job loss or gain of other coverage, and a few others. Outside of those events, you're committed to your election amount until the next open enrollment.

Yes. They cover entirely different expenses — the health FSA reimburses medical, dental and vision costs, while the Dependent Care FSA reimburses childcare or eldercare costs that let you (and a spouse, if married) work or look for work. They have separate limits ($3,400 vs $7,500 for 2026) and separate rules, and contributing to one doesn't reduce room in the other.

Not with a general-purpose health FSA — enrolling in one disqualifies you from HSA eligibility, per IRS Publication 969. A limited-purpose FSA (dental and vision only) is compatible with an HSA, and a Dependent Care FSA is always compatible regardless of HDHP status. See the full HSA vs FSA comparison for the complete eligibility picture, and the $3,400 / $7,500 figures in context of HSA and HDHP limits on the combined 2026 health-account reference.