The amount you contribute is entirely your choice, within IRS limits
You decide how much of your own money to put into your FSA each year during your employer's open enrollment period. There is no minimum amount — you can contribute $1 or nothing at all. The IRS sets a maximum: for 2024, you can contribute up to $3,300 per year to a general-purpose FSA. For a dependent care FSA, the limit is $5,000 per year (or $2,500 if you are married and file taxes separately).
The limit changes most years. The IRS adjusts it for inflation, so check your employer's enrollment materials or the IRS website each fall to see what the current year's cap is. Your employer may also set a lower limit than the IRS allows, though this is uncommon.
Once you choose an amount, that contribution is deducted from your paycheck in equal installments throughout the year. You cannot change your contribution mid-year unless you have a may have access to life event — marriage, divorce, birth of a child, loss of other health coverage, or a significant change in your dependent care costs.
Key Takeaways
- You choose your FSA contribution amount during open enrollment; there is no required minimum.
- The IRS limit for a general-purpose FSA is $3,300 in 2024, and for dependent care FSA is $5,000, but these amounts change yearly for inflation.
- Your contribution is taken from your paycheck in equal amounts throughout the year before taxes are withheld, which reduces your taxable income.
- You cannot change your contribution amount mid-year unless you experience a may have access to life event like marriage, birth, or loss of coverage.
- Money left unspent in your FSA at the end of the year is forfeited under the "use-it-or-lose-it" rule, so estimate conservatively.
How to estimate what you actually need
The hardest part of choosing an FSA contribution is guessing how much you will actually spend on may be able to access expenses in the next 12 months. Overestimate and you lose money; underestimate and you miss the tax savings.
Start by looking at what you spent on may be able to access expenses last year. Pull up your receipts for copays, coinsurance, deductibles, prescription medications, dental work, vision care, and over-the-counter items like pain relievers or allergy medicine. Add them up. If you had a major procedure or dental work last year that you do not expect to repeat, subtract it. If you know you need glasses or dental work coming up, add that in.
Be conservative. It is better to contribute $1,500 and use it all than to contribute $2,500 and lose $500. Many people contribute between $1,200 and $2,000 per year, but your number depends entirely on your health, your family size, and your insurance plan's deductible and copay structure.
Why the tax savings matter when you choose your amount
The money you contribute to an FSA comes out of your paycheck before federal income tax, Social Security tax, and Medicare tax are calculated. This means you pay less in taxes overall. If you contribute $2,000 to an FSA and your combined tax rate is 25 percent, you save $500 in taxes that year.
This tax savings is one reason to contribute something, even if you are not sure you will spend it all. However, the "use-it-or-lose-it" rule means any money left at the end of the year is forfeited, so the tax savings only matter if you actually spend the money. A $2,000 contribution that you only use $1,500 of means you lose $500 — and you do not get the tax savings on that $500 either.
Some employers offer a grace period of up to 2.5 months into the next year to spend down your FSA balance, which gives you a little more time. Ask your employer whether they offer this, because it changes how much you should contribute.
Dependent care FSA contributions work differently
A dependent care FSA is for childcare, preschool, after-school care, or adult day care for an elderly parent — not medical expenses. The IRS limit is $5,000 per year ($2,500 if married filing separately), and the contribution rules are the same: you choose the amount during open enrollment, it comes out of your paycheck pre-tax, and unused money is forfeited at year-end.
Estimating for dependent care is often easier than medical expenses because childcare costs are usually predictable. If you pay $1,200 per month for daycare, you know you will spend $14,400 per year. However, remember that you can only contribute up to the amount you actually earn — you cannot contribute more than your annual income, and if you are married, you cannot contribute more than your spouse's income either.
Also note that dependent care FSA contributions reduce the amount you can claim for the dependent care tax credit on your tax return. Talk to a tax preparer or use the IRS worksheet to figure out which option saves you more money in your specific situation.
What happens if you contribute too much
If you reach the end of the year with money left in your FSA, you lose it. This is the "use-it-or-lose-it" rule, and it applies to almost all FSAs. The money does not roll over to next year, and you do not get it back as a refund.
The only exception is if your employer offers a grace period — usually 2.5 months into the next year — during which you can still spend down your previous year's balance. Some employers also offer a carryover of up to $610 (in 2024) to the next year, but this is less common and your employer must specifically elect to offer it.
Because of this rule, many people contribute conservatively. If you are unsure whether you will spend $2,000, contribute $1,500 instead. The tax savings on $1,500 that you actually use is better than the tax savings on $2,000 that you lose.
Changing your contribution if your situation changes
You are locked into your FSA contribution for the entire year unless you have a may have access to event. The IRS defines these narrowly: marriage, divorce, birth or adoption of a child, death of a spouse or dependent, significant change in childcare costs or provider, loss of health coverage, change in your spouse's employment or benefits, or a change in your dependent care needs.
If you have a may have access to event, you have 30 to 60 days (depending on your employer) to notify your benefits administrator and change your contribution. You cannot change it just because you changed your mind or because you spent more than you expected.
This is why estimating carefully during open enrollment matters. Once you submit your election, you are committed to that amount for the year.
Frequently Asked Questions
Can I contribute the maximum FSA amount if I do not have a high deductible?
Yes. FSA contribution limits apply regardless of your insurance plan type. You can have a low-deductible plan and still contribute the full $3,300 (or your employer's lower limit) to an FSA. However, think carefully about whether you will actually spend that much, because unused money is forfeited.
What if I get married mid-year?
Marriage is a may have access to life event. You have 30 to 60 days to notify your employer and change your FSA contribution. If your spouse also has an FSA through their employer, you each have separate limits — you cannot combine them or transfer money between them.
Do I have to contribute to an FSA if my employer offers one?
No. FSA participation is optional. If you do not think you will spend enough on may be able to access expenses to make the tax savings worthwhile, or if you are worried about the use-it-or-lose-it rule, you can skip it and pay for medical or dependent care expenses with after-tax money instead.
Can I use my FSA for my spouse or children?
Yes, but only for may be able to access dependents. You can use FSA money for your spouse's and children's medical expenses, dental care, and vision care. For dependent care FSA, you can only use it for care of children under age 13 or a spouse or parent who cannot care for themselves, and only if you (and your spouse, if married) are working or looking for work.
What if I leave my job mid-year?
You typically lose access to your FSA when you leave your employer, though you may be able to use COBRA to continue it for a limited time. Any money left in your account is forfeited. This is another reason to contribute conservatively — if there is a chance you might change jobs, do not max out your FSA.