For 2026, the employee salary reduction limit for a health Flexible Spending Arrangement is $3,400. If an employer’s cafeteria plan allows carryovers, the maximum 2026 carryover amount is $680.
Those numbers matter during open enrollment because an FSA election is usually locked in for the plan year unless you have a qualifying event. Unlike an HSA, an FSA is employer-based and often subject to use-it-or-lose-it rules.
If you are choosing between an FSA and HSA-eligible health plan, read HSA Contribution Limits 2026.
2026 FSA Limits
| Item | 2026 amount |
|---|---|
| Health FSA salary reduction limit | $3,400 |
| Maximum carryover, if plan allows | $680 |
The salary reduction limit is per employee. If both spouses have access to separate health FSAs through their own employers, each may be able to elect up to the annual limit through their own plan.
Carryover Is Optional
The IRS limit tells you the maximum carryover a plan may allow. It does not force your employer to offer a carryover.
Your plan may have:
- no carryover
- a carryover up to the allowed limit
- a grace period instead of a carryover
Plans generally cannot offer both a carryover and a grace period for the same health FSA.
Carryover vs Grace Period
A carryover lets a limited amount of unused money move into the next plan year. A grace period gives you extra time after the plan year ends to incur eligible expenses using prior-year funds.
Example: If your 2026 plan allows a $680 carryover and you end the year with $500 unused, that $500 may carry into 2027. If your plan has a grace period instead, you may have a short window in 2027 to spend leftover 2026 funds, but unused money after that window can be forfeited.
Always read the plan document. Employer FSA rules can be more restrictive than the IRS maximum.
FSA vs HSA
An FSA and HSA are very different:
| Feature | Health FSA | HSA |
|---|---|---|
| Ownership | Employer plan | Individual account |
| Carryforward | Limited, if allowed | Unlimited |
| Investment option | Usually no | Often yes |
| Requires HDHP | No | Yes |
| Can affect HSA eligibility | Yes | N/A |
A general-purpose health FSA can make you ineligible to contribute to an HSA. This can also affect a spouse because the FSA may reimburse expenses for the employee, spouse, and dependents.
A limited-purpose FSA for dental and vision expenses may be HSA-compatible. This is common for people who want to contribute to an HSA while still using pretax dollars for predictable dental or vision costs.
How Much Should You Elect?
A good FSA election starts with predictable expenses, not optimism. Add up:
- regular prescriptions
- planned dental work
- expected vision expenses
- copays and coinsurance
- recurring medical supplies
Then reduce the number if your plan has no carryover or if your expenses are uncertain.
The tax savings can be meaningful, but forfeiting unused money can erase the benefit. If you are unsure, elect a conservative amount.
Dependent Care FSA Is Different
This article is about health FSAs. Dependent care FSAs have different limits, different eligible expenses, and different tax rules. Do not mix the two during open enrollment.
Bottom Line
For 2026, the health FSA salary reduction limit is $3,400, and the maximum carryover is $680 if your employer’s plan allows it.
The best FSA election is usually the amount you can confidently spend on eligible expenses. If you are HSA-eligible, check whether your FSA is general-purpose or limited-purpose before enrolling.