Does my FSA roll over?

Plain English Benefits · Updated August 13, 2026 · Education, not tax advice

The default rule nobody likes

An FSA is a deal with the IRS: you get to skip taxes on the money, and in exchange you commit it to the plan year. Whatever you haven't spent when the year (plus any grace period) ends goes back to your employer. That's the “use-it-or-lose-it” rule, and it's the single biggest reason people are afraid of FSAs.

Escape hatch #1: the grace period

Your employer can give everyone up to 2½ extra months after the plan year ends to keep spending. For a calendar-year plan, that means expenses through mid-March of the next year still count against last year's balance.

Escape hatch #2: the carryover

Alternatively, the plan can let you carry a limited amount into the next year. The IRS caps it — $660 from 2025 plan years, $680 from 2026 plan years. Anything above the cap is still forfeited. (These caps move most years; the current one is always in your plan documents.)

The rules of the game

• It's one or the other. A plan can offer a grace period or a carryover — never both.
• Or neither. Both hatches are optional. Some plans are strict use-it-or-lose-it.
• Dependent care FSAs never carry over. No carryover option exists for them — a grace period is the only flexibility a plan can add.
• Job changes end it early. Leave the company mid-year and you generally lose access to unspent funds (with limited exceptions like COBRA for health FSAs).

How to find your answer in five minutes

1. Search your benefits portal or Summary Plan Description for “grace period” or “carryover.”
2. No luck? Email HR one sentence: “Does our health FSA have a grace period or a carryover, and what's the deadline to submit claims?”
3. Mark the deadline. Most forfeited money isn't lost to the rules — it's lost to the calendar.

If December is coming and there's money left

Spend it on things that are actually eligible: glasses and contacts, dental work you've been postponing, prescription refills, first-aid restocks, sunscreen (yes) — though not vitamins (usually no). Panic-buying ineligible items just trades a forfeiture for a denied claim.