FSAs do not roll over — you lose unspent money at the end of the plan year
A Flexible Spending Account (FSA) operates under a "use-it-or-lose-it" rule. Any money you do not spend on may be able to access medical or dependent care expenses by the end of your plan year is forfeited. You cannot carry the balance into the next year, and your employer cannot return it to you. The IRS designed FSAs this way to prevent people from setting aside pre-tax money indefinitely.
The only exception is a limited carryover amount. Starting in 2013, employers were allowed to let workers carry over up to $610 (in 2024) to the next plan year. However, not all employers offer this option — it is entirely up to them. Even if your employer does allow carryover, you still lose anything above that threshold.
The plan year typically runs January 1 through December 31, though some employers use different dates. You need to know your specific plan year to understand when your money expires.
Key Takeaways
- Money left in your FSA at the end of the plan year is lost unless your employer offers a carryover option.
- If your employer allows carryover, you can move up to $610 (2024 limit) into the next year, but anything above that is forfeited.
- A grace period of up to 2.5 months after the plan year ends lets you spend or submit claims for expenses from the prior year.
- You should track your FSA spending throughout the year and adjust your election for the next year based on what you actually used.
How the grace period gives you extra time to spend
Even though the plan year ends on a specific date, most employers offer a grace period — usually 2.5 months after the plan year closes. During this time, you can still spend FSA money on may be able to access expenses incurred during the grace period itself, and you can submit claims for expenses from the prior plan year.
For example, if your plan year ends December 31, the grace period typically runs through March 15 of the next year. A medical expense you incur in January or February can be paid from your prior-year FSA balance. This is one of the few ways to avoid losing money.
Not all employers offer a grace period, and the length varies. Check your plan documents or ask your benefits administrator whether your employer provides one and when it ends. This detail matters because it changes how much time you actually have to spend the money.
The difference between carryover and grace period
Carryover and grace period are two separate features, and they work differently. A grace period lets you spend money on expenses that occur after the plan year ends, but the money still comes from the prior year's balance. A carryover moves unused money into the next plan year as if it were a fresh contribution.
Some employers offer both, some offer only one, and some offer neither. If your employer offers both, you can carry over up to $610 and then use the grace period to spend additional money on post-year-end expenses. The grace period does not reduce the carryover amount — they are independent.
Understanding which features your plan includes is the only way to know how much time and money you actually have. Request a summary of your plan's rules from your HR or benefits department.
Why you should estimate conservatively when you enroll
Because FSA money disappears if you do not use it, the safest approach is to contribute only what you are confident you will spend. Many people overestimate their medical expenses and end up forfeiting hundreds of dollars.
Look at your actual spending from the past two or three years. Did you fill prescriptions? How many times did you see a doctor? Did you buy glasses or contacts? Include dental and vision care, over-the-counter medications, and dependent care costs if you have children. Add a small buffer for unexpected expenses, but do not guess high.
If you are unsure, contribute less. You can always pay for may be able to access expenses out of pocket and keep the tax savings for a smaller amount. Losing money you contributed is worse than missing out on a tax deduction.
Common expenses people forget to claim before the important date
Many people lose FSA money because they forget to submit claims for expenses they already paid for. Receipts from earlier in the year sit in a drawer, and the important date passes. Keep receipts for all medical, dental, vision, and dependent care expenses throughout the year.
may be able to access expenses include copays, deductibles, prescription medications, glasses, contacts, dental work, therapy, and dependent care (daycare, after-school programs, summer camp). Over-the-counter items like pain relievers, allergy medicine, and first-aid supplies also count if you have a prescription or a letter from your doctor.
Submit claims as you go rather than waiting until December. This way you know what you have spent and how much money remains. If you have a large balance in November, you can plan a dental cleaning or eye exam to use the remaining funds.
What to do if you have leftover money
If you reach the end of the grace period with unspent money and your employer does not offer carryover, that money is gone. You cannot get it back, and you cannot transfer it to another account. This is the rule, and there are no exceptions.
The only action you can take is to adjust your contribution for the next plan year. If you had $400 left over, reduce your election by roughly $400 (or less if you want a safety margin). This prevents the same loss from happening again.
Some employers allow you to change your FSA election during open enrollment or if you have a may have access to life event like a birth, marriage, or change in dependent care costs. Outside of those windows, you are locked into your election for the entire plan year.
How to track your FSA balance throughout the year
Most FSA administrators provide an online portal or mobile app where you can check your balance, submit claims, and see your spending history. Log in regularly — at least quarterly — to track how much you have used and how much remains.
Keep a straightforward spreadsheet or notes on your phone listing expenses as they occur. When you submit a claim, mark it as submitted and note the date. This prevents duplicate submissions and helps you see at a glance whether you are on track to use your full balance.
By October or November, you should know roughly how much money is left. If the number is significant, talk to your doctor or dentist about scheduling preventive care before the year ends. A cleaning, eye exam, or other routine visit can use the remaining balance without wasting money.
Frequently Asked Questions
Can I roll my FSA balance into a Health Savings Account?
No. FSA and HSA are separate accounts with different rules. Money in an FSA cannot be transferred to an HSA. However, you can have both accounts in the same year if your health plan allows it — an HSA does roll over, so it is a good complement to an FSA.
What if I leave my job before the plan year ends?
You typically lose access to your FSA balance when you leave, even if you have not used the money. Some employers allow you to continue submitting claims for expenses incurred before your departure during the grace period, but the money itself is forfeited. Check your plan documents or ask HR about the specific rules.
Does the carryover limit increase every year?
Yes. The carryover limit is adjusted annually for inflation. In 2024 it is $610, but it changes each year. Your employer will notify you of the new limit during open enrollment. The IRS publishes the updated amount in the fall for the following year.
Can I get my FSA money back if I do not use it?
No. Once you contribute to an FSA, the money is not refundable. If you do not spend it by the end of the plan year and grace period, it is forfeited to your employer or the plan. This is why estimating conservatively during enrollment is so important.
What counts as an may be able to access FSA expense?
may be able to access expenses include copays, deductibles, prescription medications, dental and vision care, mental health treatment, and dependent care. Over-the-counter items count if prescribed by a doctor. Cosmetic procedures, gym memberships, and general wellness products do not count. Your plan administrator can provide a full list of may be able to access items.