FSA Rollover vs Grace Period 2026 Decision Tool
The FSA rollover vs grace period 2026 decision tool calculates what happens to your unused Healthcare FSA balance under your employer's plan rule — rollover (max $660), 2.5-month grace period, or neither (use-it-or-lose-it forfeiture per IRS Notice 2013-71).
| FSA balance | — |
| Employer rule | — |
| Planned spending by deadline | — |
| Eligible to roll / grace | — |
| Preserved (rollover + spent) | — |
| Forfeited (use-it-or-lose-it) | — |
| Real after-tax cost | — |
The FSA rollover vs grace period 2026 decision tool calculates what happens to your unused Healthcare FSA balance under your employer's plan rule. It models the IRS-permitted $660 maximum 2026 rollover to 2027, the 2.5-month grace period option (eligible expenses through March 15, 2027), and the default use-it-or-lose-it forfeiture per IRS Notice 2013-71 and Notice 2020-29.
FSA Rollover vs Grace Period — What's the Difference
An employer may offer one of three options, never both rollover and grace together (IRS rule): Rollover — up to $660 of unused 2026 FSA dollars carry into 2027 (per Rev. Proc. 2025-19, indexed annually). Grace period — you have until March 15, 2027 to incur eligible expenses against your 2026 balance, with no dollar cap. Neither — anything unused by December 31, 2026 is forfeited to your employer.
2026 FSA Limits and Rollover Cap
The 2026 Healthcare FSA contribution limit is $3,300 per employee (Rev. Proc. 2025-19). The maximum rollover from 2026 to 2027 is $660, indexed annually at 20% of the contribution limit per Notice 2013-71 as amended. Rollover dollars do NOT count toward the next year's $3,300 limit, so a maxed-out FSA participant could hold $3,300 + $660 = $3,960 in their account in early 2027.
How to Spend Down Before Forfeit
Eligible 2026 FSA expenses include prescription copays, deductibles, dental cleanings, vision exams, prescription glasses, contact lenses, OTC medications (CARES Act removed Rx requirement permanently), menstrual care, sunscreen SPF 15+, and FSA Store purchases. Use FSAstore.com for last-minute approved items. Book a dental cleaning, eye exam, or vision-correction surgery before the deadline. Stockpile contacts.
Common FSA Forfeit Mistakes
(1) Assuming you have rollover when your plan offers grace period instead — check your SPD (Summary Plan Description) before December. (2) Forgetting the grace period filing deadline — most plans require claims submitted within 90 days after March 15. (3) Overlooking dependent-care FSA — Dependent Care FSAs have NO rollover and a shorter grace window; rules differ. (4) Switching to HSA mid-year — general-purpose FSA disqualifies HSA eligibility. Use an LPFSA instead. (5) Letting the $660 forfeit silently — at the 22% bracket, $660 forfeited = $846 of pre-tax salary wasted.
Last updated May 2026. Sources: IRS Notice 2013-71, Notice 2020-29, Rev. Proc. 2025-19.