{"id":4163,"date":"2025-10-15T10:37:57","date_gmt":"2025-10-15T14:37:57","guid":{"rendered":"https:\/\/primepay.com\/blog\/fsa-contribution-limits\/"},"modified":"2025-11-26T12:23:02","modified_gmt":"2025-11-26T17:23:02","slug":"fsa-contribution-limits","status":"publish","type":"post","link":"https:\/\/primepay.com\/blog\/fsa-contribution-limits\/","title":{"rendered":"FSA Contribution Limits for 2026"},"content":{"rendered":"\n<p><span style=\"font-weight: 400;\">Good news for your employees with Flexible Spending Accounts (FSA): the contribution limit has increased.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">The Internal Revenue Service (IRS) released the <\/span><a href=\"https:\/\/www.irs.gov\/retirement-plans\/cola-increases-for-dollar-limitations-on-benefits-and-contributions\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">annual cost-of-living adjustments<\/span><\/a><span style=\"font-weight: 400;\"> affecting the maximum contribution limits for several pre-tax benefits, including health FSAs, transit\/parking accounts, and HSAs.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">FSA Contributions Limits: 2026<\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">The IRS confirmed that for plan years beginning on or after Jan. 1, 2026, the contribution limit for health FSAs will increase another $100 to $3,400. For those plans that allow a rollover of unused funds, the maximum rollover amount will increase to $680 for 2026.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Additionally, the monthly contribution and reimbursement limit for transit and parking FSAs will increase to $340 per account in 2026.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><\/td><td><span style=\"font-size: 20px;\"><strong>2026 Limits<\/strong><\/span><\/td><td><strong><span style=\"font-size: 20px;\">2025 Limits<\/span><\/strong><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Health FSA<\/span><\/td><td><b>$3,400<\/b><br><span style=\"font-weight: 400;\">Rollover &#8211; Up to $680<\/span><\/td><td><b>$3,300<\/b><br><span style=\"font-weight: 400;\">Rollover &#8211; Up to $660<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Transit\/Parking FSA<\/span><\/td><td><b>$<strong>3<\/strong><\/b><span style=\"font-weight: 400;\"><strong>40<\/strong>\/month<\/span><\/td><td><b>$325<\/b><span style=\"font-weight: 400;\">\/month<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><span style=\"font-weight: 400;\">Employees must use <\/span><a href=\"https:\/\/primepay.com\/blog\/is-an-fsa-worth-it-for-your-small-business\/\" rel=\"noopener\"><span style=\"font-weight: 400;\">FSA funds <\/span><\/a><span style=\"font-weight: 400;\">within a plan year. Remember that health FSAs have a <\/span><span style=\"font-weight: 400;\">\u201cuse-or-lose\u201d rule<\/span><span style=\"font-weight: 400;\">, meaning that any funds left unused at the end of the year are forfeited to the employer.<\/span><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img loading=\"lazy\" decoding=\"async\" width=\"1920\" height=\"1058\" src=\"https:\/\/primepay.com\/wp-content\/uploads\/PrimePay-Employee-Benefits-Summary-with-FSA.jpg\" alt=\"PrimePay Employee Benefits Summary with FSA\" class=\"wp-image-4164\" title=\"\" srcset=\"https:\/\/primepay.com\/wp-content\/uploads\/PrimePay-Employee-Benefits-Summary-with-FSA.jpg 1920w, https:\/\/primepay.com\/wp-content\/uploads\/PrimePay-Employee-Benefits-Summary-with-FSA-768x423.jpg 768w, https:\/\/primepay.com\/wp-content\/uploads\/PrimePay-Employee-Benefits-Summary-with-FSA-1536x846.jpg 1536w\" sizes=\"auto, (max-width: 1920px) 100vw, 1920px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"has-text-align-center\"><i><span style=\"font-weight: 400;\">Employees should always know their contributions and benefits. When you equip your people with a <a href=\"https:\/\/primepay.com\/software\/hr\/hr-ess\/\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/primepay.com\/software\/hr\/hr-ess\/\" rel=\"noreferrer noopener\">self-service portal<\/a>, they can easily access their specific benefit information without any back-and-forth with HR.&nbsp;<\/span><\/i><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"jump-link-two\"><span style=\"font-weight: 400;\">Two Exceptions to the FSA Rule<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Two exceptions to the use-or-lose rule permitted by the IRS are rollover and grace period. HR teams must communicate company policies to employees well in advance so people can plan accordingly.<\/span><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><b>Rollover:<\/b><span style=\"font-weight: 400;\"> If funds are not used by the end of the year, up to $680 can be rolled over from the 2026 plan year into the next plan year.\u00a0<\/span><\/li>\n\n\n\n<li><b>Grace Period:<\/b><span style=\"font-weight: 400;\"> An employer can adopt a grace period for their health FSA. As explained by the <\/span><a href=\"https:\/\/www.irs.gov\/pub\/irs-drop\/n-13-71.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">IRS<\/span><\/a><span style=\"font-weight: 400;\">, \u201cA grace period is a period of up to two months and 15 days immediately following the end of a plan year during which a participant may use amounts remaining from the previous plan year (including amounts remaining in a health FSA) to pay expenses incurred for certain qualified benefits during that two-month and 15-day period.\u201d&nbsp;<\/span><\/li>\n<\/ol>\n\n\n\n<p><span style=\"font-weight: 400;\">A health FSA may incorporate either of these features; however, a plan may not have a rollover <\/span><i><span style=\"font-weight: 400;\">and<\/span><\/i><span style=\"font-weight: 400;\"> grace period.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Plans may also include run-out periods that provide participants additional time to submit claims incurred during the plan year (typically 90 days). This can be in addition to either a rollover or grace period. <\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Can PrimePay Help?<\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">PrimePay provides pre-tax <\/span><a href=\"\/software\/hr\/benefits-administration\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">benefits administration<\/span><\/a><span style=\"font-weight: 400;\"> of, including HRAs, HSAs, and FSAs. When you choose PrimePay\u2019s pre-tax benefit plan administration, you receive a dedicated service team, access to our support portal, automated claims processing, and a PrimePay debit card and mobile app.<\/span><\/p>\n\n\n\n<p><span class=\"add-arrow\"><a href=\"https:\/\/primepay.com\/demo-request\/\" target=\"_blank\" rel=\"noopener\">Schedule a call today<\/a><\/span><\/p>\n\n\n\n<p><strong><em>Please read our disclaimer <a href=\"https:\/\/primepay.com\/disclaimer\/\" target=\"_blank\" rel=\"noopener\">here.<\/a><\/em><\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Good news for your employees with Flexible Spending Accounts (FSA): the contribution limit has increased.&nbsp; The Internal Revenue Service (IRS) released the annual cost-of-living adjustments affecting the maximum contribution limits for several pre-tax benefits, including health FSAs, transit\/parking accounts, and HSAs.&nbsp; FSA Contributions Limits: 2026 The IRS confirmed that for plan years beginning on or [&hellip;]<\/p>\n","protected":false},"author":44,"featured_media":4166,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[13],"tags":[],"class_list":["post-4163","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-benefits-compliance"],"acf":[],"_links":{"self":[{"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/posts\/4163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/comments?post=4163"}],"version-history":[{"count":2,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/posts\/4163\/revisions"}],"predecessor-version":[{"id":11074,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/posts\/4163\/revisions\/11074"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/media\/4166"}],"wp:attachment":[{"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/media?parent=4163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/categories?post=4163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/primepay.com\/wp-json\/wp\/v2\/tags?post=4163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}