IRS FSA Contribution Limits for Health and Dependent Care

For plan years beginning in 2026, the IRS FSA contribution limits are $3,400 for a Health Flexible Spending Account and $7,500 for a Dependent Care FSA. The Health FSA cap is per employee, so two working spouses with separate employer plans can each contribute the full amount. The Dependent Care FSA cap is per household, and it drops to $3,750 if you are married filing separately.¹ The dependent care number is the headline change: it jumped from $5,000, where it had been stuck for decades, under the One Big Beautiful Bill Act signed on July 4, 2025, and it applies to taxable years beginning after December 31, 2025.

Health FSA: $3,400 per Employee

The salary-reduction cap for a Health FSA rose from $3,300 in 2025 to $3,400 in 2026.² The limit adjusts each year for inflation and applies to each employee individually, not to a family. If your Health FSA covers your spouse and children, your own cap is still $3,400. If your spouse has a separate Health FSA at their job, they can elect their own $3,400 on top of yours.

Employer contributions (matching dollars, seed money) generally do not count against your $3,400. There is one exception. If your employer offers the money as a choice between cash and an FSA deposit and you pick the FSA, that amount is treated as a salary reduction and counts toward your limit.³

One feature worth planning around: your entire annual election is available on day one of the plan year, even though payroll deductions come out gradually. Elect $3,400 in January, need surgery in February, and the full balance is there to use. Eligible expenses include doctor copays, prescription drugs, dental work, vision care, and other out-of-pocket medical costs that qualify under IRS rules.

Dependent Care FSA: $7,500 per Household

The Dependent Care FSA cap for 2026 is $7,500 per household, or $3,750 if you are married filing separately.¹ Because it is a household limit, two spouses with access to separate Dependent Care FSAs cannot each contribute $7,500; their combined total is capped at $7,500. Coordinate before open enrollment.

Qualifying expenses cover the care of a child under age 13, or of a spouse or dependent who is physically or mentally incapable of self-care and lives with you for more than half the year.⁴ The care must be necessary for you (and your spouse, if married) to work or actively look for work. Daycare, preschool, before- and after-school programs, and elder care qualify. Overnight camps and tuition for kindergarten and above do not.

Use-It-or-Lose-It, Carryover, and Grace Periods

Money left in your FSA at the end of the plan year is normally forfeited.⁵ The IRS allows employers to offer one of two softeners for Health FSAs, but not both.

Carryover

If your Health FSA plan includes a carryover, you can roll up to $680 of unused 2026 funds into 2027.² Carryover dollars do not count against the next year’s contribution limit, so a fresh $3,400 election plus a full $680 carryover can put up to $4,080 in play. The carryover figure adjusts for inflation alongside the contribution cap.

Grace Period

The alternative is a grace period of up to two and a half months after the plan year ends during which you can incur new eligible expenses against the prior year’s balance.⁵ For a calendar-year plan, that runs through March 15. There is no dollar cap during a grace period; the whole remaining balance stays available.

Run-Out Period

A run-out period is separate from either option above, and plans often offer one alongside a carryover or grace period. It does not extend the time to incur expenses; it extends the time to file claims for expenses already incurred. Run-out periods are typically 90 days, set by the employer rather than the IRS.

Dependent Care FSAs follow the same forfeiture rule and can have a grace period, but the carryover provision applies only to Health FSAs.⁶

If You Also Want an HSA

A standard Health FSA disqualifies you from contributing to a Health Savings Account. The IRS treats a general-purpose Health FSA as other health coverage that conflicts with HSA eligibility, whether or not you actually spend from it.⁷

A Limited-Purpose FSA is the workaround. It reimburses only dental and vision expenses, so the IRS does not treat it as conflicting coverage and you keep HSA eligibility. It carries the same $3,400 contribution limit and $680 carryover as a standard Health FSA for 2026.² You cannot use both accounts to pay the same expense, so keep your receipts sorted.

Changing Your Election Mid-Year

Once the plan year starts, your election is locked. You cannot change it because you overestimated or changed your mind. The only path to a mid-year adjustment is a qualifying life event the IRS recognizes as grounds for a change.⁸ Recognized events include:

Change in marital status: marriage, divorce, legal separation, annulment, or death of a spouse.
Change in number of dependents: birth, adoption, placement for adoption, or death of a dependent.
Change in employment status for you, your spouse, or a dependent that affects benefits eligibility.
Change in dependent eligibility, such as a child aging out of coverage.
Change in residence that affects your access to your plan’s network or provider.

For Dependent Care FSAs specifically, a change of care provider or a significant change in the cost of care is also a permitted event.⁹ A daycare rate increase or a switch to a new provider can justify adjusting a DCFSA election. That exception does not apply to Health FSAs.

Any change must be consistent with the event and takes effect going forward, not retroactively. Most plans require the request within 31 days before to 60 days after the event, so move quickly when something changes.⁹

1
Office of the Law Revision Counsel. 26 USC 129 – Dependent Care Assistance Programs
2
FSAFEDS. 2026 FSAFEDS Contribution Limits
3
Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans
4
Internal Revenue Service. Topic No. 602 – Child and Dependent Care Credit
5
Internal Revenue Service. IRS: Eligible Employees Can Use Tax-free Dollars for Medical Expenses
6
FSAFEDS. What Is the Use or Lose Rule
7
Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans
8
eCFR. 26 CFR 1.125-4 – Permitted Election Changes
9
FSAFEDS. Qualifying Life Events