What Are the FSA Contribution Limits for 2026?

A flexible spending account (FSA), also known as a flexible spending arrangement, is a tax-advantaged health benefit that some employers offer to help employees pay for healthcare costs. It allows you to set aside pretax dollars to cover eligible medical, dental, and vision expenses that aren’t covered by other health plans or reimbursed elsewhere. You can use FSA funds to pay for expenses for yourself, your spouse, and your qualifying dependents.

There’s a limit on how much you can contribute to an FSA each year. In October 2025, the IRS announced higher contribution limits for 2026 to help keep up with inflation. 

What are the new FSA contribution limits for 2026?

As in previous years, the FSA contribution limit is increasing. For 2026, employees can contribute up to $3,400 to a health FSA, according to IRS Revenue Procedure 2025-32. Those with a health savings account (HSA) may also contribute up to $3,400 to a limited purpose FSA (LPFSA), which can generally be used only for eligible dental and vision expenses.

You’ll typically choose how much to contribute to your FSA for the upcoming year during your employer’s open enrollment period. This is the time each year when you can make benefit elections or changes.

For example, if your open enrollment period is in November 2025, your new benefits — including your FSA contribution — would usually start in January 2026. The amount you elect to contribute will then be divided evenly across your paychecks throughout the year and deducted before taxes.

Even though the money is taken out gradually through payroll deductions, the entire annual amount you elect is available on the first day of your plan year. That means you can use your full FSA balance right away to cover eligible healthcare expenses, even if you haven’t yet contributed that much through payroll.

What other changes are affecting FSAs from 2025 to 2026?

A dependent care FSA is a separate account that helps you save money on child care or adult day care expenses. You can use it to pay for eligible costs such as day care, preschool, before- and after-school programs, summer day camps, or care for an adult dependent who can’t care for themselves. The account allows you to set aside money before taxes, reducing your taxable income.

In 2025, the contribution limit for dependent care FSAs was $5,000 per household (or $2,500 for married couples filing separately). Unlike with health FSAs, the dependent care FSA limit isn’t indexed for inflation, so it typically stays the same unless Congress passes a law to change it.

Effective January 1, 2026, the contribution limit will rise to $7,500 per household (or $3,750 for married couples filing separately). This increase is part of the One Big Beautiful Bill Act (OBBBA). Employers must decide whether to update their plans to match the new federal limits.

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• Need to use your flexible spending account (FSA) funds before the deadline? Check out this list of FSA-eligible items and services, including everything from dental care to prescription medications.

How did FSA limits change from 2025?

In 2025, FSA contributions were capped at $3,300 per person. If your employer allows it, you can carry over up to $660 to 2026.   

For 2026, the FSA contribution limit is increasing to $3,400, and you’ll be able to carry over up to $680 to 2027. That means you can set aside $100 more from your paycheck for eligible healthcare expenses. If your spouse has their own FSA through a different employer, they can also contribute up to the full amount. But if you don’t expect to contribute that much on healthcare, you can choose to contribute a smaller amount.   

Here’s a look at the contribution limits for 2025 and 2026 and how they compare year over year. 

How does an FSA work?

An FSA lets you set aside money from your paycheck before taxes to pay for qualified healthcare or dependent care expenses. Because contributions are made with pretax dollars, FSAs can lower your taxable income and save you money throughout the year.

Here’s what you should know about an FSA: 

• Fund it through payroll deductions: Your FSA contributions are automatically taken from your paycheck, based on the amount you select during your benefits enrollment period. Some employers may also add funds to your account, though they’re not required to.

• Take advantage of tax savings: Money you contribute to your FSA isn’t subject to federal income tax. That means you save on every dollar you set aside for eligible healthcare expenses. For example, if you earn $100,000 and contribute the 2026 maximum of $3,400, you’ll only pay taxes on $96,600 of your income.

• Know your spending deadlines: Your full annual contribution is available at the start of the plan year, but FSAs are “use it or lose it” accounts. Any unused funds may be forfeited after the deadline. Check with your HR department to find out your plan’s rules and whether you have a grace period or carryover option.

How can you spend FSA funds?

You can use your healthcare FSA to pay for a wide range of out-of-pocket medical expenses, including coinsurance, copayments, and deductibles. These funds can also be used for certain everyday items, such as lip balm and sunglasses, if they meet the requirements. 

Keep in mind that all expenses must be medically necessary and not reimbursed by another health plan, employee benefit, or other source. It’s also a good idea to check with your employer or FSA provider to confirm which products and services are eligible. Some items may only be eligible if you submit a letter of medical necessity from your healthcare professional, along with your receipts.

Here are a few other healthcare FSA-eligible items that you may want to use your funds on before they expire. You might have expected some of these, but others could surprise you. 

• Blood pressure monitors 

• Braces 

• Dental fillings and crowns

• Dentures 

• First aid kits 

• Root canals

• Menstrual products (pads, tampons, menstrual cups)

• MRIs and other diagnostic imaging

• Physical therapy sessions

• Prenatal vitamins

• Prescription eyeglasses and contact lenses

• Theragun or other massage devices (with a letter of medical necessity) 

What happens if you contribute too much to your FSA?

Before enrolling in a healthcare FSA, it’s a good idea to estimate your upcoming medical expenses for the year. Consider your deductible, any planned procedures or dental work, and everyday health-related items you might need. These could be prescription medications, menstrual products, or contact lenses.

Planning ahead can help you avoid putting too much money into your account. Because FSAs have a “use it or lose it” rule, any unused funds left after your employer’s deadline may be forfeited.

If you overestimate your expenses, you could end up losing some of your money at the end of the plan year. Let’s say you contribute $3,000 to your FSA for 2026 but only spend $2,500. You could lose the remaining $500 unless your employer offers a grace period, which gives you extra time to spend your funds. Some employers instead offer a carryover option, which allows you to roll over a limited amount of unused money into the next plan year (up to $680 in 2026).

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Written by:

Charlene Rhinehart, CPA

Charlene Rhinehart, CPA, is a personal finance editor at GoodRx. She has been a certified public accountant for over a decade.

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