Last updated: October 2, 2026. This article is for general information only and is not personal financial, tax, or insurance advice. FSA rules depend on your employer’s plan, so confirm the details with your plan administrator, the IRS, or a qualified tax professional.
If your employer offers a flexible spending account (FSA), open enrollment is usually the only time each year you can decide how much to set aside for the next plan year. Pick too little and you leave tax savings on the table. Pick too much and you may forfeit money you cannot spend in time.
The complication this year is that the IRS has not yet published the official 2027 health FSA limit, which normally arrives in the fall. This guide gives you the confirmed 2026 numbers, explains how to plan while 2027 is still pending, and walks through a simple method for choosing a contribution.
Key Takeaways
- The 2026 health care FSA limit is $3,400 per employee, with a maximum carryover of $680 into 2027 for plans that offer carryover.
- The 2026 dependent care FSA limit is $7,500 per household ($3,750 for each spouse if married filing separately), after a law change that raised the old $5,000 cap.
- The official 2027 health FSA limit has not been announced as of this writing. Do not assume a figure; check your plan’s enrollment materials, which will state the limit your employer uses.
- An FSA is generally “use it or lose it”: a plan can offer a limited carryover or a short grace period, but not both.
- If you also want to contribute to an HSA, a general-purpose health FSA can make you ineligible.
What an FSA Does
An FSA lets you set aside part of your paycheck before income taxes to pay for eligible expenses. Because the money is pre-tax, you generally avoid federal income tax and payroll taxes on it. There are two common types: a health care FSA for medical, dental and vision costs, and a dependent care FSA for expenses like child care or adult day care that let you work.
Confirmed 2026 Limits
The federal FSAFEDS program, which publishes IRS-announced figures, lists the following 2026 maximums:
| FSA type | 2026 limit | Notes |
|---|---|---|
| Health care FSA | $3,400 | Up $100 from 2025 |
| Carryover (if your plan allows) | $680 | Moves unused funds into the next year |
| Dependent care FSA | $7,500 per household | $3,750 per individual, including married filing separately |
Employers can set lower limits than the IRS maximum, and the FSAFEDS minimum election of $100 applies to that federal program, so your own plan may differ.
What About 2027?
The IRS usually releases the next year’s health FSA limit in the fall as part of its annual inflation adjustments. Until it appears, any 2027 figure you see online is a projection. Some sites project a small increase from $3,400, but that is an estimate, not an announcement. If your open enrollment window closes before the IRS announces the number, your employer will use the limit it has communicated, so read your plan guide carefully.
The same caution applies to the dependent care limit. The $7,500 figure is the current law for 2026; check your plan documents for what applies in 2027.
How to Choose Your Contribution
The goal is to elect an amount you are highly confident you will spend. A practical method:
- Total last year’s out-of-pocket costs. Add up copays, prescriptions, dental work, vision, deductibles and coinsurance from your records or insurer statements.
- Add known 2027 expenses. Think of scheduled procedures, braces, new glasses, a baby on the way, or a prescription that is changing.
- Subtract anything uncertain. If you are unsure about an expense, leave it out of your election.
- Check carryover or grace rules. If your plan allows a carryover, you have more room for error than if it does not.
- Elect that amount, not the maximum. Electing the limit only makes sense if you will actually spend it.
A simple example
Suppose you expect $1,800 in predictable health costs next year, such as prescriptions, two dental visits and new glasses. If your combined federal and payroll tax rate on that income is about 25%, an illustrative tax saving would be roughly $450. That figure depends entirely on your own tax situation, so treat it as an example, not a promise. The saving is real only if you spend the money; any forfeited balance is a loss.
Rules That Trip People Up
Use it or lose it
Money left in a health FSA at the end of the plan year is generally forfeited, unless your plan offers a carryover (up to $680 for 2026) or a grace period of up to 2.5 months. Employers can offer one of these, not both, and some offer neither.
The full amount is available on day one
For a health care FSA, your full annual election is typically available at the start of the plan year, even though it is deducted from your paycheck gradually. That can be useful for a large early expense, but it also means that if you leave the job mid-year, you may have spent more than you contributed.
Mid-year changes need a qualifying event
You generally cannot change your election after open enrollment unless you have a qualifying life event, such as marriage, divorce, birth or adoption, or a change in employment status. Your plan administrator decides what qualifies under the plan rules.
FSA and HSA do not mix
If you want to contribute to a health savings account, a general-purpose health FSA usually disqualifies you. A limited-purpose FSA, which covers only dental and vision, is the common workaround. See our guide to 2027 HSA contribution limits and the rules that trip people up for the other side of that decision.
Dependent care costs are separate
The dependent care FSA is a different account with its own rules. It generally covers care for a qualifying child under 13 or a dependent who cannot care for themselves, so that you can work. It does not cover medical expenses, and you generally cannot use health FSA funds for child care.
What Counts as an Eligible Expense?
Eligible health expenses generally include copays, deductibles, prescriptions, dental care, vision care and many over-the-counter medical items. The IRS maintains the official rules in Publication 502 and Publication 969, and your plan administrator can confirm whether a specific purchase qualifies. Keep receipts, since plans may ask you to substantiate claims.
Enrollment Checklist
- Find your employer’s open enrollment dates and deadline.
- Check whether your plan offers carryover, a grace period, or neither.
- Decide whether an HSA or an FSA is the better fit for your health plan.
- Estimate your predictable 2027 expenses and elect only what you will use.
- Review your 2026 balance now, and schedule eligible care before the plan year ends if you have funds to spend.
- Keep your receipts and plan documents for reference.
Open enrollment for health insurance also runs this fall. If you buy coverage on your own instead of through an employer, see our guide to ACA open enrollment for 2027, including dates and premium changes. If you are 65 or older, our Medicare open enrollment guide explains the new Part D deductible and cost cap.
FAQ
What is the health FSA limit for 2027?
The IRS has not announced the official 2027 limit as of October 2, 2026. The 2026 limit is $3,400. Check your employer’s plan materials for the figure that applies to you.
Can I carry over unused FSA money?
Only if your plan offers it. For 2026 the maximum carryover is $680, and a plan can offer either a carryover or a grace period of up to 2.5 months, not both.
What is the dependent care FSA limit?
For 2026 it is $7,500 per household, or $3,750 per person if married filing separately.
Can I have an FSA and an HSA?
Generally not with a general-purpose health FSA. A limited-purpose FSA for dental and vision expenses can usually be paired with an HSA.
Can I change my FSA election during the year?
Usually only after a qualifying life event, as defined by your plan.
The Bottom Line
An FSA is a useful tax tool when you spend what you elect and a waste of money when you do not. With the official 2027 limit still pending, the safest approach is to base your election on your own predictable costs, confirm your plan’s carryover or grace rules, and avoid assuming the maximum is the right amount.
Sources: FSAFEDS 2026 maximum limit announcement (based on IRS figures), IRS Publication 969 and Publication 15-B, and employer plan guidance. Figures reflect information available on October 2, 2026.
