Can You Roll Over Unused FSA Money to Next Year?
FSA money does not roll over to the next year under federal rules
Your Flexible Spending Account operates under a use-it-or-lose-it rule. Any money you do not spend on may have access to medical expenses by the end of the plan year is forfeited — you cannot move it to next year, and you cannot get it back as a refund. This rule exists because FSAs are funded with pre-tax dollars, and tax law prevents the money from being carried forward indefinitely.
The only exception is a limited carryover amount that some employers choose to offer. A small number of plans allow you to carry forward up to $610 (as of 2024, though this amount changes yearly) into the next plan year. Even if your employer offers this option, you must use the carried-over money within the first two and a half months of the new year or lose it.
Because of this structure, the strategy is not to roll over unused money — it is to avoid having unused money in the first place. That means estimating your medical spending carefully when you enroll and adjusting that estimate if your circumstances change mid-year.
Key Takeaways
- FSA funds are forfeited at the end of the plan year if you do not spend them on may have access to medical expenses; there is no rollover to the next year under standard federal rules.
- Some employers offer a limited carryover of up to $610 into the next plan year, but you must spend it within the first two and a half months or lose it.
- The best approach is to estimate your medical spending accurately during open enrollment so you do not contribute more than you will use.
- If your life changes mid-year — a new baby, a surgery, a job loss — you may be able to lower your FSA contribution through a may have access to life event.
How the use-it-or-lose-it rule actually works
The rule is tied to the tax code. Because FSA contributions come out of your paycheck before taxes, the IRS does not allow the money to sit indefinitely. At the end of each plan year (usually December 31, though some employers use different dates), any balance you have not spent on may have access to medical expenses disappears. Your employer cannot refund it to you, and you cannot transfer it to a savings account or another type of account.
The forfeited money goes back to your employer's plan. Some employers use it to cover plan administration costs; others return it to the remaining participants as a credit toward next year's premiums. Either way, you lose access to your own contribution.
This applies even if you had a medical expense that you simply have not submitted a receipt for yet. Once the plan year ends, you have a limited window — usually 60 to 90 days into the next year — to submit claims for expenses that occurred in the old year. But if you miss that deadline, you cannot recover the money.
The carryover option: what it is and how it works
In 2013, the IRS created a carryover provision that allows employers to offer a grace period or a limited carryover. Not all employers use this option, so check your plan documents or ask your benefits administrator whether yours does.
A carryover lets you move unused money into the next plan year. The maximum is $610 for 2024 (this limit increases slightly most years). If you have $800 left on December 31 and your plan offers carryover, you can move $610 forward and lose the remaining $190.
A grace period is different: it gives you an extra two and a half months (through March 15 of the following year) to spend money from the current year. You do not move the money; you simply have more time to use it. Some plans offer grace periods instead of carryover, and some offer both.
Even with carryover, the carried-over money must be spent by the end of the grace period or it is forfeited. You cannot carry it forward a second time.
Strategies to avoid losing money
The most effective strategy is to estimate your medical spending conservatively during open enrollment. Review the past two or three years: How much did you spend on copays, deductibles, prescriptions, dental work, and vision care? Add a small buffer for unexpected expenses, but do not guess wildly high hoping to save on taxes.
If you have a spouse or partner with their own FSA, coordinate your contributions. One person might contribute more if they have planned dental work or know they will need glasses; the other might contribute less. This spreads your household's medical spending across two accounts and reduces the risk that one account will have a large unused balance.
Keep receipts and track your spending throughout the year. Many FSA providers offer a mobile app or online portal where you can see your balance and monitor how much you have left to spend. If you notice in October that you have $800 unspent and your plan does not offer carryover, you have time to schedule a dental cleaning, buy over-the-counter medications, or get a vision exam before year-end.
If your circumstances change mid-year — you have a baby, you lose a job, you get married, or your health needs shift — you may be able to change your FSA contribution through a may have access to life event. This is not automatic; you must request the change within 30 to 60 days of the event (rules vary by employer). Lowering your contribution can prevent you from over-contributing and losing money.
What counts as a may have access to medical expense
FSA money can only be spent on medical expenses that meet IRS rules. The list is long but specific: copays and coinsurance, deductibles, prescription medications, dental work, vision care (including glasses and contacts), hearing aids, mental health treatment, and many other services. Over-the-counter medications are covered only if you have a prescription.
Money cannot be spent on health insurance premiums, cosmetic procedures, gym memberships, or general wellness products. If you are unsure whether an expense qualifies, ask your FSA provider before you spend the money. Some providers have a searchable database of may have access to expenses on their website.
Keeping good records is important. If you are audited or if your FSA provider questions a claim, you will need to show a receipt or an explanation of benefits from your provider. The IRS can require you to repay money that was spent on non-may have access to expenses.
How to learn about your plan offers carryover
Your employer's benefits administrator or your FSA provider can tell you whether your specific plan allows carryover or a grace period. This information is usually in your plan's summary of benefits and coverage, which you receive during open enrollment. If you cannot find it, call your benefits department or log into your FSA provider's website and look for plan rules or FAQs.
Do not assume that because one employer offered carryover, your current employer does too. Each plan is different, and the choice belongs to the employer, not the FSA provider. If your employer does not offer carryover, the use-it-or-lose-it rule applies in full.
Frequently Asked Questions
Can I get a refund of unused FSA money?
No. The use-it-or-lose-it rule is final. Once the plan year ends, any money you have not spent on may have access to medical expenses is forfeited. Your employer cannot refund it, and you cannot recover it through any process.
What happens if I submit a receipt after the plan year ends?
You can usually submit claims for expenses that occurred during the plan year for 60 to 90 days after the year ends (your plan documents will specify the exact deadline). If you submit within that window, the claim can be paid from your old-year balance. After the deadline closes, you cannot claim old expenses.
Can I move FSA money to an HSA or another account?
No. FSA money cannot be transferred to a Health Savings Account, a regular savings account, or any other account. It can only be spent on may have access to medical expenses during the plan year (or grace period, if your plan offers one).
If my plan offers carryover, do I have to use it by a certain date?
Yes. Carried-over money must be spent by the end of the grace period, which is typically March 15 of the following year. After that date, any remaining balance is forfeited.
Can I lower my FSA contribution mid-year if I think I will not use all the money?
Only if you have a may have access to life event, such as a birth, marriage, divorce, job loss, or significant change in your health or family status. You must request the change within 30 to 60 days of the event. Routine changes to your contribution are only allowed during open enrollment.