Most FSAs do not roll over at all — you lose what you don't spend by the end of the plan year

Flexible Spending Accounts (FSAs) operate under a "use-it-or-lose-it" rule. Money you set aside in an FSA for the current year does not carry forward to the next year. If you contribute $2,500 and spend $1,800, the remaining $700 is forfeited — your employer keeps it. This is a federal rule that applies to most FSAs, and it exists because FSAs are tax-advantaged accounts.

The only exception is a carryover provision that some employers offer. If your employer's plan includes this option, you may roll over up to $610 (in 2024) to use in the following year. Not all employers offer this, and the amount that can roll over changes each year based on inflation adjustments set by the IRS. Even with a carryover, any amount beyond the limit is still lost.

A separate option called a grace period allows you to spend down your current-year balance for up to 2.5 months into the next plan year, but this is different from rolling money over. The grace period extends the time you have to use the money you already set aside; it does not let you keep unused funds permanently.

Key Takeaways

  • FSA money you do not spend by the end of your plan year is lost — this is the default rule for nearly all FSAs.
  • Your employer may offer a carryover option that lets you roll over up to $610 (2024 limit) to the next year, but only if they have chosen to include it in the plan.
  • A grace period is not the same as a carryover; it gives you extra time to spend your current-year money, not to keep it.
  • The carryover limit increases each year with inflation, so check your plan documents or your employer's benefits website to see the current year's amount.

How to learn about your employer offers a carryover

Your employer decides whether to include a carryover provision in the FSA plan. This is not something you can request or negotiate — it is either built into your plan or it is not. The easiest way to find out is to check your plan's Summary Plan Description (SPD), which your employer is required to provide. This document lists all the rules of your FSA, including whether carryover is allowed.

You can also ask your benefits administrator or HR department directly. They can tell you in one sentence whether carryover is available and, if it is, what the current-year limit is. If your employer does not offer carryover, they may offer a grace period instead — ask about that as well.

What happens to money you do not use

When your plan year ends, any balance you have not spent is forfeited. The money does not go to you, and it does not roll into a savings account. Instead, it goes back to your employer or is used to pay plan administration costs. From a tax perspective, this is actually why the use-it-or-lose-it rule exists: FSAs are tax-advantaged, meaning you contribute pre-tax dollars. If you could keep unused money indefinitely, the tax advantage would be too generous.

This is why timing matters. If you know you have $300 left in your FSA in November and your plan year ends December 31, you should spend that money on may be able to access expenses before the deadline. may be able to access expenses include copays, deductibles, prescription medications, and many over-the-counter health products. Once the plan year closes, you cannot go back and claim reimbursement for expenses you paid out of pocket.

Grace period versus carryover — what is the difference

These two options sound similar but work very differently. A grace period extends the time you have to spend money from your current plan year. If your plan year ends December 31 and you have a 2.5-month grace period, you can use your current-year FSA funds through March 15 of the next year. The money itself is still from the year you set it aside for; you are just getting extra time to spend it.

A carryover lets you move unused money into the next plan year as if it were a fresh contribution. If you have $400 left on December 31 and your plan allows a $610 carryover, that $400 becomes part of your next year's FSA balance. You can spend it anytime during the new plan year, and it does not count against your new contribution limit.

Some employers offer both. If yours does, you can use the grace period to spend down your current-year money, and then roll over whatever is left (up to the limit) into the next year. If your employer offers only one, it is usually the grace period.

The carryover limit and how it changes each year

The IRS sets a maximum amount you can carry over, and it adjusts annually for inflation. In 2024, the limit is $610. In 2023, it was $570. In 2022, it was $550. These increases are small but real, and they mean the amount you can roll over is slightly higher each year.

Your employer's plan document will specify the carryover limit for the current year. If you are unsure what it is, your benefits administrator can tell you. The limit applies to the total amount you can carry over, not to each contribution separately — if you have $800 unused and the limit is $610, you can only roll over $610.

How to avoid losing money in your FSA

The best strategy is to estimate conservatively when you set your contribution at the start of the year. Look at your actual medical spending from the past two years — copays, prescriptions, dental work, vision care — and use that as a baseline. If you are unsure, contribute less rather than more. You can always increase your contribution next year if you find you did not use all your money.

If you have money left over late in the year, spend it on may be able to access expenses you know you will need. Stock up on prescription refills, pay for upcoming dental cleanings or eye exams, or purchase over-the-counter items like pain relievers, allergy medication, or first-aid supplies. Keep receipts for everything, because you will need them if the plan administrator asks for proof of the expense.

If your employer offers a grace period, use it. It gives you an extra 2.5 months to spend down your balance without losing money. And if your employer offers carryover, do not assume you will use it — carryover is helpful, but it is not a reason to over-contribute in the first place.

Frequently Asked Questions

Can I carry over more than the IRS limit?

No. The IRS sets a maximum carryover amount each year, and your employer cannot allow you to roll over more than that limit, even if they want to. In 2024, the limit is $610. Any amount above that is forfeited.

What if I change jobs — do I lose my FSA balance?

Yes. FSAs are tied to your employer's plan, not to you personally. If you leave your job, you lose any unused FSA balance, even if you have not reached the end of the plan year. You may be able to use COBRA to continue your FSA for a limited time, but that is a separate process and has its own rules.

Does my spouse's FSA carryover affect mine?

No. Each FSA is independent. If you and your spouse both have FSAs through your own employers, each account has its own carryover limit and its own use-it-or-lose-it deadline. Money in one account does not affect the other.

Can I request an exception to the use-it-or-lose-it rule?

No. The use-it-or-lose-it rule is federal law for FSAs. Your employer cannot waive it or make exceptions, even if you have a documented medical reason for not spending your balance. The only legal way to keep unused money is if your employer's plan includes a carryover provision.

What counts as an may be able to access FSA expense?

may be able to access expenses include copays, coinsurance, deductibles, prescription medications, dental work, vision care, and many over-the-counter health products. The IRS publishes a full list, but common items include pain relievers, allergy medication, antacids, and first-aid supplies. Cosmetic procedures and general wellness items do not count.