FSA Contribution Limits

The IRS adjusts FSA contribution limits annually for inflation and publishes the new figures each October in a Revenue Procedure. For plan years beginning January 1, 2026, the limits come from IRS Revenue Procedure 2025-32. There are separate limits for healthcare FSAs and dependent care FSAs, and they operate independently — contributing the maximum to one does not reduce what you can contribute to the other.

2026 FSA Contribution Limits at a Glance

Healthcare FSA: $3,400 per Employee in 2026

The healthcare FSA limit is $3,400 per employee for plan years beginning in 2026. This is a per-person limit — it applies to each employee individually regardless of family size or coverage tier. If both you and your spouse are employed and each has access to a healthcare FSA through your respective employers, each of you can contribute up to $3,400, for a combined household total of $6,800.

What the limit includes. The $3,400 cap applies to your salary reduction contributions — the amount you elect to have withheld from your paycheck pre-tax. It does not include employer contributions such as seed money or flex credits that your employer may add to your account. Non-elective employer contributions generally do not count toward the $3,400 ACA-mandated limit.

Employer-set lower limits. Your employer may impose a lower contribution limit than the IRS maximum. Many employers set limits below $3,400 to manage the risk of early-year FSA advances that employees take before contributing enough to cover. Check your plan documents or your benefits portal for your employer's specific limit.

The full amount is available on day one. Unlike HSAs and DCFSAs, a healthcare FSA funds the full annual election immediately. If you elect $3,400 in January and use all of it in February before leaving your job in March, your employer cannot recover the funds already reimbursed. This front-loading feature is specific to healthcare FSAs and does not apply to dependent care FSAs.

Dependent Care FSA: $7,500 per Household in 2026

The dependent care FSA limit increased significantly for 2026 — from $5,000 to $7,500 per household (or $3,750 for married individuals filing separately). This increase came from the One Big Beautiful Bill Act signed July 4, 2025. Unlike the healthcare FSA limit, which is indexed annually for inflation, the DCFSA limit had been frozen at $5,000 since 1986. The 2026 increase is a legislative change, not an inflation adjustment.

Per-household, not per-person. The $7,500 limit applies to your household, not to each employee individually. If both spouses have DCFSA access through their employers, the total combined contributions from both accounts cannot exceed $7,500 for the household ($3,750 each for married filing separately). This is an important distinction from healthcare FSAs, where each spouse can contribute the full limit independently.

The dependent care tax credit interaction. DCFSA contributions reduce the expenses eligible for the federal Dependent Care Tax Credit. The credit applies to up to $3,000 of qualifying expenses for one dependent or $6,000 for two or more dependents. Because the DCFSA now allows $7,500 in pre-tax contributions — exceeding the credit base of $6,000 — most families will want to run the numbers on whether the pre-tax DCFSA contribution or the tax credit (or a combination) produces a better result. For high earners where the credit is phased down to 20%, the pre-tax DCFSA deduction is almost always more valuable.

DCFSA funds are available only as contributed. Unlike healthcare FSAs, DCFSA funds are not front-loaded. You can only spend what has been withheld from your paycheck to date. If you have contributed $1,200 through April, you cannot submit a $2,000 claim in April — even though your full annual election is $7,500.

Healthcare FSA Rollover: $680 in 2026

The healthcare FSA rollover limit is the maximum unused balance an employer can allow to carry forward from one plan year to the next. For 2026 plan years, the rollover cap is $680. This is an optional employer feature — your employer may offer it, offer a grace period instead, or offer neither.

Rollover or grace period — not both. Employers can offer one of two accommodations for unused healthcare FSA funds:

• Rollover up to $680: Unused funds up to $680 carry forward into the next plan year. The rollover amount is available on January 1 alongside your new election.
• Grace period of up to 2.5 months: You have until mid-March to spend the prior year's remaining balance on eligible expenses incurred before the deadline.

An employer cannot offer both. Check your Summary Plan Description to determine which option — if any — your employer offers. The rollover and grace period options apply to healthcare FSAs only. Dependent care FSAs do not have a rollover or grace period option.

The rollover does not increase your contribution limit. If you carry forward $680 from 2025, your 2026 healthcare FSA balance can be as high as $4,080 ($680 rollover + $3,400 new election), but you are still limited to contributing $3,400 in new salary reductions for 2026.

Limited-Purpose FSA (LPFSA): Same Limit as Healthcare FSA

A limited-purpose FSA — offered to employees who are enrolled in an HDHP with an HSA — follows the same $3,400 contribution limit as a full healthcare FSA in 2026. The LPFSA is restricted to dental and vision expenses only, which is what makes it compatible with an HSA. See What Is an FSA? for a full explanation of how the LPFSA interacts with HSA eligibility.

How FSA Limits Compare to HSA Limits

Healthcare FSA limits are significantly lower than HSA limits, and FSAs lack the rollover and portability features of HSAs:

For a full side-by-side comparison and guidance on which to choose, see HSA vs. FSA: What's the Difference?

California Note

California conforms to federal law for both healthcare FSA and dependent care FSA contributions. Your FSA salary reductions reduce your California taxable income — unlike HSA contributions, which California does not recognize as deductible.

For a California tech worker in the 9.3% state bracket, the combined federal and state tax savings on a full $3,400 healthcare FSA contribution are approximately $1,200–$1,400 depending on your federal bracket. The DCFSA increase to $7,500 is particularly valuable for California families: the full $7,500 reduces both federal and California taxable income.