A health FSA can forfeit unused money after the applicable plan deadline. For a plan year beginning in 2026, an employer may permit carryover up to $680. A plan can instead offer a grace period of up to 2½ months, but cannot combine that grace period with health-FSA carryover.
Neither extension is automatic. HSA balances carry forward without an annual spending deadline.
The $900 balance example
Assume a calendar-year 2026 health FSA has $900 left and permits the full $680 carryover, with no other eligible claims. The amount at risk of forfeiture is $900 − $680 = $220. If that employer elected a lower carryover, substitute the actual plan amount.
Spending $900 just to avoid losing $220 is not the comparison to make.
Service date is different from claim submission
A run-out period allows claims for expenses already incurred during the covered period. It does not by itself make a January service eligible against the old year. Ask the administrator for the plan-year end, eligible service deadline, carryover or grace-period election, and final claim-submission date.
Reference
Which health-FSA deadline controls which action?
| Plan provision | What it permits |
|---|---|
| Carryover | Limited unused balance available in the next plan year |
| Grace period | Additional time to incur eligible expenses |
| Run-out period | Additional time to submit claims for eligible earlier expenses |
Take it with you
FSA/HSA: actions and records
- Read the actual employer plan election, including a lower carryover if applicable.
- Separate appointments or purchases not yet incurred from claims awaiting submission.
People also ask
Questions about 2026 FSA Year-End Deadline: Carryover, Grace and Claims
Can a general-purpose health FSA affect HSA eligibility?
Yes. General-purpose health-FSA coverage can make someone ineligible to contribute to an HSA, including during some carryover or grace-period coverage. Limited-purpose arrangements have different rules.
Do all FSAs forfeit unused funds at year-end?
A health FSA has use-it-or-lose-it rules, but the employer may adopt a permitted carryover or grace period. A carryover protects only the allowed amount; it does not preserve an unlimited remaining balance. Read the plan document for the expense-incurrence deadline and the separate claim-submission deadline.
Can I have both an FSA and an HSA?
Generally not a standard health FSA alongside an HSA, since a standard FSA can disqualify HSA eligibility. A limited-purpose FSA may be compatible in some plans: confirm with the plan administrator
What's the difference between a grace period and a carryover?
A grace period extends the time to spend the current balance into the new plan year by up to about two and a half months. A carryover instead allows a limited dollar amount to roll into the new year's balance. An employer can offer one, the other, or neither, but not both
Does the FSA deadline apply to when I spend the money or when I incur the expense?
Generally the expense needs to be incurred within the plan year (or grace period, if applicable): simply having the card available isn't what matters. The actual eligible service or purchase needs to occur in time
Is there a deadline to submit FSA reimbursement claims after the plan year ends?
Often yes, a separate run-out period exists for submitting claims for expenses already incurred during the plan year. Not the same thing as the spending deadline, so check both dates with your administrator
Why doesn't an HSA have a use-it-or-lose-it rule like an FSA?
HSAs are structured as individually owned accounts intended to accumulate over time, unlike FSAs. Those are employer-established benefit accounts with historically stricter year-based forfeiture rules
What can I actually buy with remaining FSA funds before the deadline?
Generally IRS-qualified medical, dental, and vision expenses: check your specific plan's eligible expense list, since some plans have their own additional restrictions beyond the IRS baseline
If I lose FSA funds to the forfeiture rule, can I get them back later?
Generally no: funds forfeited under the use-it-or-lose-it rule are not recoverable after the deadline (and any grace period or run-out period) has passed
References for 2026 FSA Year-End Deadline: Carryover, Grace and Claims
The $680 ceiling applies to health-FSA carryover from a plan year beginning in 2026. Dependent-care FSAs and non-calendar plan years require their own rules and dates.