FSA contribution limits for 2026 and 2027

FSA limits for 2025, 2026 and 2027

When the IRS publishes the 2027 health FSA numbers, they'll appear in its annual inflation adjustment revenue procedure. Until then, plan your 2027 election around your employer's stated maximum, which can be lower than the IRS limit.

Example: a married couple with two health FSAs and dependent care

Say Sam and Riley are married, file jointly, both work, and pay $9,000 a year for preschool for their 4-year-old. Both employers offer a health FSA, and Riley's also offers a dependent care FSA. This is an illustration for 2026, not tax advice.

1. Health FSAs are per employee. Sam can elect up to $3,400 through Sam's employer, and Riley up to $3,400 through Riley's: $6,800 together.
2. Dependent care is per household. Together they can exclude up to $7,500, no matter how many employers offer a plan. They elect $7,500 through Riley's plan.
3. Check earned income. The dependent care amount can't be more than the lower-earning spouse's earned income. Both earn well over $7,500, so the full amount works.
4. The rest of the preschool bill ($1,500) is paid with regular money.
5. Total set aside before tax: $6,800 + $7,500 = $14,300. Contributions aren't subject to federal income tax or Social Security and Medicare tax.

At year end, Sam has $900 left and Sam's plan allows the 2026 carryover: $680 rolls into 2027 and $220 is lost. Riley's plan uses a grace period instead, so Riley has until mid-March 2027 to incur expenses against any 2026 balance.

Rules that trip people up

• Per employee, not per household (health FSA). Each spouse can elect the full amount through their own employer. HealthCare.gov describes the limit as per year per employer.
• Grace period or carryover, not both. A plan can give you up to 2 1/2 months after the plan year to spend the money, or let you carry over up to the carryover limit. It can't offer both for a health FSA. Without either, unspent money is lost.
• Mid-year changes are limited. You choose your amount at the start of the plan year. IRS Publication 969 says you can change or revoke it only if specifically allowed by law and the plan. Plans follow IRS permitted election change rules, so ask your plan administrator which life events count.
• Full amount on day one. A health FSA must let you use your whole annual election at any time during the year, even before you've paid it in.
• HSA conflict. A general-purpose health FSA (yours or your spouse's) generally ends HSA eligibility. A limited-purpose FSA doesn't. See HSA vs FSA.
• Self-employed people can't have an FSA. It's an employer benefit.

For what the money can pay for, see what is FSA eligible.

This is general information, not tax advice. Your plan's own documents set your maximum, deadlines and carryover. Check with your plan administrator or a tax advisor.

Ask Gabriel with your numbers

Gabriel can work through the same math with your own household, plans and expected expenses, free. Ask Gabriel free.

The clinical portion of Gabriel Core or Plus may be FSA eligible, and Gabriel can provide an itemized statement. Check with your plan administrator before you pay.