What you can roll over from an FSA

You cannot roll over money from a Flexible Spending Account (FSA) to another FSA in the way you might move money between retirement accounts. FSAs are "use-it-or-lose-it" accounts, which means any balance you don't spend by the end of the plan year is forfeited — with two exceptions that let you keep some or all of your money.

The first exception is the grace period. If your employer offers one, you get an extra 2.5 months after the plan year ends to spend down your FSA balance. Money spent during the grace period comes from your previous year's balance, not a new contribution. The second exception is the carryover, which lets you roll up to $640 (in 2024) into the next plan year. Not all employers offer either option, and you cannot use both in the same year — your plan uses one or the other, not both.

If you change jobs or lose coverage, you may be able to move FSA money to a Health Savings Account (HSA) if you enroll in a high-deductible health plan. This is different from a rollover and has its own rules about timing and amounts.

Key Takeaways

  • FSA money does not roll over to another FSA; instead, unused balances are forfeited at the end of the plan year unless your employer offers a grace period or carryover.
  • A grace period gives you 2.5 months after the plan year ends to spend your FSA balance, while a carryover lets you keep up to $640 (2024 limit) for the next year — your plan offers one or the other, not both.
  • The carryover amount is adjusted annually for inflation and varies by year, so check your plan documents for the current limit.
  • If you leave your job or lose FSA coverage, you may move FSA funds to an HSA only if you enroll in a high-deductible health plan within 60 days of losing coverage.
  • Money in a grace period or carryover still must be spent on may have access to medical expenses under FSA rules, or it is forfeited.

How the carryover works

If your employer's FSA plan includes a carryover feature, you can roll up to $640 of your unused balance into the next plan year. This amount is set by the IRS and changes each year — it was $570 in 2023 and $610 in 2022. Any balance above the carryover limit is lost.

The carryover applies to money you contributed but did not spend. If you contributed $3,000 to your FSA in 2024 and spent $2,500, you can carry over up to $640 of the remaining $500 into 2025. The other $360 is forfeited. You do not choose which dollars carry over; the carryover is automatic if your plan offers it.

Carryover money counts toward your contribution limit in the new year. If the 2025 limit is $3,300 and you carry over $640, you can contribute only $2,660 in new money for 2025. This means the carryover reduces how much you can add from your paycheck in the following year.

How the grace period works

A grace period is an extra 2.5 months after your plan year ends during which you can spend your FSA balance. If your plan year ends on December 31, the grace period runs through March 15 of the following year. Any expenses you incur during the grace period can be paid from your FSA, even though they fall outside the official plan year.

The grace period applies to your full balance at the end of the plan year, not a capped amount. If you have $1,200 left on December 31, you can spend all $1,200 during the grace period. Money not spent by the end of the grace period is forfeited.

Grace periods are less common than carryovers, and not all employers offer them. Some plans offer neither, meaning any unspent balance is lost on the last day of the plan year. Check your plan documents or ask your benefits administrator which option your employer uses.

Moving FSA money to an HSA when you change coverage

If you leave your job or lose FSA coverage and enroll in a high-deductible health plan (HDHP), you may be able to move your FSA balance to an HSA. This is called an FSA-to-HSA rollover and is one of the few ways to transfer FSA money without losing it.

To do an FSA-to-HSA rollover, you must enroll in the HDHP within 60 days of losing your FSA coverage. The rollover must happen within 60 days as well. You cannot roll over more than the amount you had in your FSA on the day you lost coverage. The money moves into the HSA and is treated as an HSA contribution, subject to that year's HSA contribution limits.

Not all employers allow FSA-to-HSA rollovers, and the rules vary by plan. If you are leaving a job, ask your former employer's benefits team whether the rollover is available and what paperwork you need. If you are switching plans within the same employer, ask your benefits administrator about the process.

What happens if you do not use your FSA balance

Any FSA money you do not spend by the end of the plan year (or grace period, if your plan offers one) is forfeited. You cannot withdraw it as cash, transfer it to a savings account, or move it to a different type of account unless you may have access to for an FSA-to-HSA rollover.

This is why many people estimate their FSA contributions carefully. If you contribute too much and cannot spend it all on may have access to medical expenses, you lose the money. may have access to expenses include copayments, deductibles, prescription medications, and certain medical equipment and supplies — but not health insurance premiums (with limited exceptions) or over-the-counter medications without a prescription.

If you have a carryover or grace period available, you have more time to spend the money, but the important date is still firm. Once the grace period ends or the new plan year begins (whichever applies), any remaining balance is gone.

Carryover and grace period limits by year

The IRS sets the FSA carryover limit each year based on inflation. The limit has been:

  • 2024: $640
  • 2023: $570
  • 2022: $610
  • 2021: $550
  • 2020: $550

The grace period, when offered, is always 2.5 months — there is no annual change. Not all employers offer either option, so check your plan documents to see what applies to you. If your employer does not mention a carryover or grace period in the plan summary, assume neither is available and plan to spend your full FSA balance by the end of the plan year.

Frequently Asked Questions

Can I roll over my FSA to my spouse's FSA?

No. FSA money cannot be transferred between accounts, even to a spouse's FSA. Each FSA is separate, and the use-it-or-lose-it rule applies to each account individually. If your spouse has an FSA, their balance is independent of yours.

What if my employer changes the plan year?

If your employer changes when the plan year ends, the carryover or grace period still applies to the balance at the end of the old plan year. The transition may be confusing, so contact your benefits administrator for details about how the change affects your specific account.

Can I carry over FSA money if I leave my job mid-year?

No. If you leave your job before the plan year ends, your FSA coverage ends, and any remaining balance is forfeited. You do not get a carryover or grace period. Your only option is an FSA-to-HSA rollover if you enroll in an HDHP within 60 days.

Does the carryover limit explore to dependent care FSAs?

No. Dependent care FSAs have different rules and do not allow carryovers. Any unused dependent care FSA balance is forfeited at the end of the plan year, with no grace period or carryover option available.

If I use the grace period, can I still carry over money?

No. Your plan offers either a grace period or a carryover, not both. If you have a grace period, any money left after the grace period ends is forfeited. If you have a carryover, the grace period is not available.