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There are three different FSA deadlines

This is where nearly all the confusion comes from. A plan can carry several dates that sound like the same deadline and do completely different things.

The plan year end. The normal cutoff for incurring expenses against that year's money. Many employer plans run to 31 December, but yours does not have to.

A grace period. If your plan offers one, this is extra time to incur new eligible expenses — up to two and a half months after the plan year ends (IRS Publication 969). Your employer can offer less, or none.

A run-out period. Extra time to submit claims for expenses already incurred. It is not extra time to spend.

That last distinction costs people money. If your plan year ended in December and the run-out period runs to March, that does not mean you can buy something in February against last year's balance. It means you can still file a February receipt for something you bought before the spending window closed.

The default

Unused money generally goes back to the employer

Use-it-or-lose-it is the structure of a health FSA, not a penalty your employer bolted on. Amounts left at the end of the plan year generally cannot roll forward unless the plan provides one of the permitted exceptions — and your employer cannot simply refund the balance to you (IRS Publication 969).

That does not mean every dollar vanishes on the last day. Claims still processing, an available grace period, or an allowed carryover all change what actually remains.

Two possible exceptions

A carryover or a grace period, but never both

A health FSA can be designed with a grace period or a carryover. It cannot offer both, and employers are not required to offer either.

For 2026 the employee salary-reduction limit is $3,400, and where a plan allows a carryover the maximum is $680 — a plan may set its own lower (IRS Rev. Proc. 2025-32). So finishing the year with $900 unused, under a plan allowing the full carryover, moves $680 forward and forfeits the rest once claims settle.

A carryover does not eat into next year's limit. Carry $680 forward and you can still elect the full $3,400 for the new year.

One caution if you are checking the IRS yourself: Publication 969 as currently published still shows the 2025 figures of $3,300 and $660. The 2026 numbers come from the revenue procedure, which is the controlling source.

  • Open your FSA portal and find the balance page. Look for an “incur by” or “spend by” date.
  • Search your Summary Plan Description for “carryover”, “grace period” and “run-out”.
  • Find the claims deadline separately. A later submission date is not more time to spend.
  • If the wording is unclear, ask one question: what is the last date I can incur a new expense against this plan year's money?

What qualifies

The eligible list is broader than most people think

Before buying something purely to avoid forfeiting a balance, check it actually qualifies. FSA funds generally reimburse qualified medical expenses: copays, deductibles, dental and vision care, prescriptions, supplies and qualifying equipment (IRS Publication 502).

Two categories people routinely miss. Over-the-counter medicines are reimbursable without a prescription, and menstrual care products — tampons, pads, liners, cups — are reimbursable too. Both have been eligible since amounts paid after 31 December 2019, and plenty of people still do not know.

Do not treat “sold at a pharmacy” as the test. Ordinary vitamins, toiletries and general wellness purchases do not become eligible just because you have a balance to burn.

Deciding how much to elect next year is a different question

If you leave your job

An FSA usually does not leave with you

This is where an FSA and an HSA behave completely differently. Unused health FSA money left when your employment ends is generally forfeited, unless continuation coverage such as COBRA applies to the FSA itself.

Your plan may still allow a run-out period to submit claims for expenses incurred before coverage ended. Check the termination date and the claims deadline before assuming the balance is gone.

An HSA is yours. The account and the balance go with you when you change jobs, which is the single largest practical difference between the two. The HSA rules people get wrong

The bottom line

Find the spending date before the submission date

Do not start with the balance. Start with the dates: the end of your plan year, then whether you have a carryover or a grace period, then the run-out period separately.

If you are close to a deadline, spend it on things you actually need and your plan will actually reimburse. Your employer's plan documents govern all of it.