Flexible spending account (FSA) limits are set each year by the IRS, and for 2026 the biggest change is for dependent care: the annual limit rose from $5,000 to $7,500 under the One Big Beautiful Bill Act (Public Law 119-21). The health FSA limit moved from $3,300 to $3,400, and the carryover amount from $660 to $680.
This guide lists every 2026 FSA limit with its source, explains the rules that trip people up (use-it-or-lose-it, grace period versus carryover, mid-year changes), and works through the tax saving with a simple example. If you are weighing an FSA against a health savings account, read our FSA vs HSA comparison next.
These are the 2026 federal limits. Your employer's plan can set a lower limit, so check your plan documents before you choose an amount.
| Benefit | 2026 limit | 2025 limit | Source |
|---|---|---|---|
| Health FSA (salary reduction) | $3,400 | $3,300 | IRS Pub. 15-B (2026); Pub. 969 (2025) |
| Health FSA maximum carryover | $680 | $660 | Rev. Proc. 2025-32 section 4.15; Pub. 969 (2025) |
| Dependent care FSA | $7,500 | $5,000 | Public Law 119-21 section 70404; Pub. 15-B (2026) |
| Dependent care FSA, married filing separately | $3,750 | $2,500 | Public Law 119-21 section 70404 |
| Commuter benefits (transit pass or vanpool) | $340 a month | - | IRS Pub. 15-B (2026) |
| Qualified parking | $340 a month | - | IRS Pub. 15-B (2026) |
The 2026 figures come from IRS Revenue Procedure 2025-32, which sets the inflation-adjusted amounts for 2026 as in effect on October 9, 2025. The IRS has not yet published the 2027 limits; they normally appear in the autumn, and we update this page when they do.
For plan years beginning in 2026, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA above $3,400. A plan that does not respect the dollar limit stops being a cafeteria plan, so employers do apply it.
Health FSAs are generally use-it-or-lose-it plans. A plan can soften that in one of two ways, but not both: it can allow a carryover of unused money (up to $680 for 2026), or it can give a grace period of up to 2 1/2 months after the plan year ends. A plan that adopts a carryover cannot also provide a grace period for the health FSA. Many plans offer neither, so confirm which rule yours uses before you elect an amount.
You can change or revoke your election only if the law and your plan specifically allow it, for example after a qualifying life event. Do not assume you can adjust the amount mid-year.
FSAs are employer-established benefit plans. Self-employed people are not eligible for them. If you work for yourself, an HSA (if you have a high-deductible plan) or the self-employed health insurance deduction is the route to look at instead.
The dependent care FSA limit was raised from $5,000 to $7,500 ($2,500 to $3,750 for married filing separately) for taxable years beginning after December 31, 2025. The change was made by section 70404 of Public Law 119-21 and is reflected in IRS Publication 15-B for 2026.
The tax-free amount cannot be more than the smaller of your earned income or your spouse's earned income, and the care has to be for a qualifying person and provided so that you can work. The qualifying-person tests are the same as for the dependent care credit (see IRS Publication 503). If you use the FSA, think about how it interacts with the credit before you elect the full amount; our child tax credit guide covers the related family credits.
For 2026, the monthly exclusion for qualified parking is $340, and the monthly exclusion for commuter highway vehicle transportation and transit passes is also $340 (IRS Publication 15-B). These are separate from the health and dependent care FSAs, but they are usually offered through the same payroll benefits system, so people often see them listed together on enrolment forms.
An FSA lowers your taxable wages by the amount you contribute. As a simple illustration, take a single filer whose taxable income sits in the 22% bracket (2026 taxable income over $50,400 but not over $105,700 for single filers, per Rev. Proc. 2025-32).
| Contribution | Amount | Federal income tax saved at 22% |
|---|---|---|
| Health FSA at the 2026 maximum | $3,400 | $748 |
| Dependent care FSA at the 2026 maximum | $7,500 | $1,650 |
These figures count federal income tax only. They do not include any state income tax effect or any payroll-tax effect, which depend on your state and your plan. You only keep the saving if you actually spend the money on eligible expenses during the plan year (or the carryover or grace rules apply), because unused health FSA money is generally forfeited. You also cannot deduct, as an itemized medical expense, any amount that the FSA reimburses.
To see how a salary reduction changes your overall bill, try the US tax calculator.
An employee covered by a high-deductible health plan and a general-purpose health FSA generally cannot contribute to an HSA. A limited-purpose FSA, which pays only for certain expenses, is one of the arrangements an HDHP-covered employee can have alongside an HSA. The full comparison is in our FSA vs HSA guide, and the HSA limits are in our HSA contribution limits guide.
Check the primary documents before you elect an amount: IRS Publication 15-B (2026), Revenue Procedure 2025-32 and IRS Publication 969. Your employer's plan documents govern what your plan actually offers.