FSA Contribution Limit 2026
Current year
For 2026, the FSA Contribution Limit is $3,400 (Health FSA salary reduction limit) and $680 (Maximum carryover).
Effective 2026-01-01Source: Rev. Proc. 2025-32 (IRS)Verified 2026-08-29
Compared with 2025
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Health FSA salary reduction limit | $3,300 | $3,400 | +$100 (+3.0%) |
| Maximum carryover | $660 | $680 | +$20 (+3.0%) |
Who it applies to
The limit reaches an employee who funds a health flexible spending arrangement through an employer's cafeteria plan by electing voluntary salary reductions for a taxable year beginning in 2026. It is written as a dollar limitation on those salary reductions, so it is stated per employee rather than per household or per plan. The $680 carryover figure applies only where the cafeteria plan itself permits unused amounts to be carried over; a plan that offers no carryover is not given one by the revenue procedure. Rev. Proc. 2025-32 publishes the adjusted amounts and does not restate the eligibility or election rules that § 125 sets out.
What changed this year, and why
For taxable years beginning in 2026, the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,400, up from the $3,300 that Rev. Proc. 2024-40 set for taxable years beginning in 2025. Where the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $680, up from $660. Both moves are the ordinary annual inflation adjustment, generally determined by reference to § 1(f); nothing about who may elect a health FSA or how a carryover is authorised changed with them. Rev. Proc. 2025-32 states the 2026 items for Code provisions as in effect on October 9, 2025.
Common questions
- How much can I contribute to a health FSA for 2026?
- For taxable years beginning in 2026 the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,400. That is the ceiling on what an employee may elect to divert from pay into the arrangement for the year. Rev. Proc. 2025-32 states the figure as an inflation-adjusted item and sets no different amount for any filing status.
- Did the health FSA contribution limit go up for 2026?
- Yes. Rev. Proc. 2025-32 sets the § 125(i) salary reduction limitation at $3,400 for taxable years beginning in 2026, where Rev. Proc. 2024-40 had set $3,300 for taxable years beginning in 2025. The maximum carryover amount moved in the same direction, from $660 to $680. Both are routine inflation adjustments rather than a change in the underlying rule.
- What is the health FSA carryover limit for 2026?
- If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $680. That cap is separate from the $3,400 salary reduction limit: the salary reduction limit governs what you elect during the taxable year, while the carryover figure governs how much of what you did not spend the plan may move forward. Rev. Proc. 2025-32 states both figures in its cafeteria plans item.
- Does every health FSA allow a carryover?
- No. Rev. Proc. 2025-32 states the $680 maximum carryover conditionally, applying it if the cafeteria plan permits the carryover of unused amounts. The revenue procedure does not require a plan to offer a carryover and sets no amount for a plan that offers none. Whether unused money moves forward is a feature of the plan document the employer adopted, not something the inflation adjustment grants.
- Which tax year does the $3,400 FSA limit apply to?
- Rev. Proc. 2025-32 states the figure for taxable years beginning in 2026, and its effective date rule in section 5 applies the 2026 adjusted items to taxable years beginning in 2026. Cafeteria plans are not among the items routed instead to the procedure's calendar year rule. The limit therefore attaches to a taxable year beginning in 2026, not to the date on which any individual salary reduction happens to be withheld.
- Where does the $3,400 health FSA limit come from?
- It is the dollar limitation in § 125(i) of the Internal Revenue Code, as adjusted for inflation. Rev. Proc. 2025-32 publishes the adjusted amount for 2026 in its cafeteria plans item, and the procedure says the inflation-adjusted items it sets out are generally determined by reference to § 1(f). The figure is the statute's own indexing rule applied, not a discretionary number chosen each year.
- Is the health FSA limit per employee or per household?
- Rev. Proc. 2025-32 states it as a dollar limitation on voluntary employee salary reductions, so it is expressed per employee for the taxable year. The revenue procedure gives no separate household figure, no separate figure for a married couple, and no combined ceiling covering spouses who each fund an arrangement through their own employer's cafeteria plan. Anything beyond the per-employee limitation is not something this document states.
- Did the One, Big, Beautiful Bill Act change the health FSA limit?
- Rev. Proc. 2025-32 exists to reflect amendments made by the legislation commonly known as the One, Big, Beautiful Bill Act, and it lists the Code provisions that act changed. Section 125 is not among them. The cafeteria plans item is carried forward as an ordinary inflation adjustment, so the $3,400 salary reduction limit and the $680 maximum carryover for 2026 come from indexing rather than from new legislation.
Every amount on this page is a published figure rather than yours. The Health FSA headroom takes the number you enter and works it out against them, showing which published figure it used.
Self-employed people cannot have a health FSA
A health FSA is an employer-established benefit plan, typically offered as part of a cafeteria plan alongside other employer-provided benefits. Because the plan must be established by an employer, self-employed persons aren't eligible for FSAs. If you are self-employed - whether as a sole proprietor, independent contractor, or partner in a partnership - you cannot set up or participate in a health FSA. There is no workaround through a spousal employer either; eligibility flows from being a common-law employee of the sponsoring employer. Note that even among eligible employees, certain limitations may apply to highly compensated participants or key employees.
Self-employed persons aren’t eligible for FSAs.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
You elect once a year and cannot change it at will
At the beginning of each plan year you must designate how much you want to contribute for the entire year. Your employer then deducts that amount from your pay periodically, generally every payday, in accordance with your annual election. Once the plan year begins, you generally cannot change or revoke your contribution election; a change is permitted only if it is specifically allowed by law and by the plan itself, such as after a qualifying change in family or employment status. This means the salary reduction amount you locked in at open enrollment controls what goes into your health FSA for the full year, up to the annual limit of $3,400.
At the beginning of the plan year, you must designate how much you want to contribute. Then your employer will de- duct amounts periodically (generally, every payday) in ac- cordance with your annual election. You can change or re- voke your election only if specifically allowed by law and the plan.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
The whole election is available on day one
A health FSA is not an account you slowly build up over the year. As soon as coverage begins, you must be able to receive the maximum amount of reimbursement for the year - the full amount you elected to contribute - even though your paycheck has only funded a small fraction of it at that point. The maximum amount you can receive tax free is the total amount you elected to contribute for the year. So if you elect $3,400 and incur a large qualified medical expense in January, the plan can reimburse you the entire $3,400 even though only a few pay periods of contributions have been made. Distributions must still be used to reimburse qualified medical expenses you incur during the coverage period.
You must be able to receive the maximum amount of reimbursement (the amount you have elected to contribute for the year) at any time during the coverage period, regardless of the amount you have actually contributed. The maximum amount you can receive tax free is the total amount you elected to con- tribute to the health FSA for the year.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
Use it or lose it, and the two escapes from it
FSAs are generally "use-it-or-lose-it" plans: amounts left in the account at the end of the plan year are forfeited. The plan can soften this rule in one of two ways, but not both. First, the plan may offer a grace period of up to 2 1/2 months after the end of the plan year, during which leftover funds can still reimburse qualified medical expenses incurred in that extension window; any remaining balance still cannot be refunded to you. Second, the plan may allow a carryover of up to $680 of unused amounts into the next plan year; any amount above that threshold is forfeited. The carryover does not reduce or affect the maximum salary reduction contributions you are permitted to make in the new year.
FSAs are generally “use-it-or-lose-it” plans. This means that amounts in the account at the end of the plan year can’t generally be carried over to the next year. However, the plan can provide for either a grace period or a carry- over. The plan can provide for a grace period of up to 2 1/2 months after the end of the plan year.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
What the money may be spent on, and what it may not
Health FSA funds may be used only to reimburse qualified medical expenses incurred by you, your spouse, all dependents you claim on your tax return, certain dependents you could have claimed but for specific exceptions, and your child under age 27 at the end of your tax year. The IRS explicitly lists three categories of expenses for which you can't receive distributions from your FSA: amounts paid for health insurance premiums, amounts paid for long-term care, and amounts that are covered under another health plan. Because FSA reimbursements are already tax-free, you cannot also claim those same expenses as an itemized medical deduction on Schedule A. In short, the money must pay for eligible medical costs of covered individuals and cannot double-dip with other coverage or deductions.
You can’t receive distributions from your FSA for the fol- lowing expenses. • Amounts paid for health insurance premiums. • Amounts paid for long-term care. • Amounts that are covered under another health plan.
Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2025-32 (IRS)
- Health FSA salary reduction limit
For taxable years beginning in 2026, the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,400.
- Maximum carryover
If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $680.
By year
Every published year
11 years on record, 2026 back to 2016. Each year links to its own page, its own document and its own verification date.
- the Consolidated Appropriations Act let a health FSA carry over every unused dollar from a plan year ending in 2020 to one ending in 2021, and from 2021 to one ending in 2022, so Publication 969 prints that relief in the place the carryover cap used to occupy