Somewhere in the next few weeks your employer's benefits portal will close, and before it does it will ask how much of your 2027 salary you want diverted into a flexible spending account — the FSA, or flex spending account, on most enrollment screens. It will ask for a precise figure. It will not tell you that the ceiling on that figure has not been published.
This applies to the United States. Everything below is drawn from the IRS's own releases and publications, and where a number is a projection rather than a published limit, it is labelled as one.
What the IRS has set, and what it has not
The health FSA limit is an inflation-adjusted figure the IRS publishes each autumn alongside around sixty other tax provisions. Here is the actual state of play:
| Figure | 2025 | 2026 | 2027 |
|---|---|---|---|
| Health FSA salary reduction limit | $3,300 | $3,400 | Not published |
| Carryover maximum into the next year | $660 | $680 | Not published |
| Dependent care FSA exclusion | $5,000 | $7,500 | $7,500 (set by statute) |
| Dependent care, married filing separately | $2,500 | $3,750 | $3,750 (set by statute) |
| Qualified parking and transit, monthly | $325 | $340 | Not published |
The 2026 column comes from IRS news release IR-2025-103 (opens in a new tab), published on 9 October 2025, which sets out the detail from Revenue Procedure 2025-32. The dependent care row comes from a different place entirely, and that difference is the subject of its own section below.
Why 2027 is late
The adjustment is not discretionary. Section 125(i) of the Internal Revenue Code ties the health FSA limit to a cost-of-living calculation, and that calculation needs Consumer Price Index data from the Bureau of Labor Statistics.
The 2025 government shutdown interrupted the publication of that data, leaving a gap in the series the formula consumes. Tax analysts at Thomson Reuters examined the problem in September 2026 and concluded that the missing inflation month poses little risk to the eventual 2027 figures (opens in a new tab) — but "little risk to the figures" is not the same as "no delay in publishing them", and the delay is what you are living with at your enrollment deadline.
For scale, the projections that benefits consultancies have published are clustered tightly. Bloomberg Tax modelled a 3.2% inflation adjustment across the 2027 tax provisions. Mercer and Employee Benefits Corporation both project a health FSA limit of $3,500 and a carryover of $700. Those are credible estimates from firms that do this every year and are usually close. They are still estimates, and your plan administrator cannot accept an election based on one.
Dependent care FSA 2027: the number that did change
While the health FSA limit sits unpublished, the dependent care limit made the largest single jump in its history and did it quietly.
For decades the dependent care exclusion was $5,000 ($2,500 married filing separately), a figure fixed in statute in 1986 and never indexed. The One, Big, Beautiful Bill raised it. IRS Publication 15-B (opens in a new tab) states the position for employers plainly: for the 2026 tax year, the annual dependent care FSA limit was raised from $5,000 to $7,500, and from $2,500 to $3,750 for married filing separately.
Two consequences follow, and both matter at enrollment:
- It is already in force. This is not a 2027 change waiting on guidance. It applied from the 2026 plan year, and if your 2026 election was capped at $5,000 out of habit, you left $2,500 of pre-tax room unused.
- It is not waiting on the revenue procedure. Because Congress set the amount in legislation rather than handing it to annual indexing, it is not one of the figures the pending IRS release will adjust. Benefits practitioners including Mercer and Newfront note that the new amounts are not indexed for inflation, which means they do not drift upward on their own the way the health FSA limit does.
The trap that costs the most: an FSA can switch off your HSA
If your employer offers a high deductible health plan, this is the part to read twice.
IRS Publication 969 (opens in a new tab) sets out what counts as disqualifying coverage for health savings account purposes, and an ordinary general purpose health FSA — the kind that reimburses medical, dental and vision expenses alike — is on that list. Enrol in one and you cannot contribute to an HSA for that plan year. Neither can your spouse, if their general purpose FSA could reimburse your expenses.
The distinction that rescues it is the limited purpose FSA, restricted to dental and vision costs. That version does not disqualify you, which is precisely why employers pairing a high deductible plan with an HSA tend to offer the limited purpose version rather than the general one.
There is a further wrinkle in the timing. Publication 969 allows HSA contributions during a general purpose FSA's grace period only if the balance in that FSA at the end of the prior plan year was zero. A few hundred dollars left over on 31 December can therefore push back the month in which you become HSA-eligible.
| General purpose health FSA | Limited purpose FSA | HSA | |
|---|---|---|---|
| Covers medical, dental, vision | Yes | Dental and vision only | Yes |
| Requires a high deductible plan | No | Usually offered with one | Yes |
| Can you contribute to an HSA at the same time | No | Yes | — |
| Unused money at year end | Forfeited beyond the carryover | Forfeited beyond the carryover | Yours permanently |
| 2026 limit | $3,400 | $3,400 | $4,400 self-only, $8,750 family |
The HSA column is the one with no asterisk on the last row, and it is the reason the choice matters beyond this plan year. The 2026 and 2027 HSA contribution limits are both already published — the IRS sets those in the spring under a different schedule — so if the HSA route is open to you, the figures you need for next year exist today. The eligibility rules, including the deductible floor and the out-of-pocket ceiling that disqualifies more plans than people expect, are in the guide to the 2026 HSA limits and what changed.
Carryover or rollover, the grace period, and the money you lose on 31 December
An FSA is use-it-or-lose-it, softened by one of two optional reliefs that your employer chooses between:
- A carryover of up to $680 of unused 2026 money into 2027. Employers may set a lower cap, or none.
- A grace period of up to two and a half months after the plan year ends, during which you can still incur expenses against last year's balance.
Carryover and rollover are the same thing. The IRS says carryover, in Revenue Procedure 2025-32 and in Publication 969; enrollment portals, benefits handbooks and payroll providers overwhelmingly say rollover. The practical consequence is that the 2027 rollover limit people are searching for has in fact already been published, and it is $680 — the ceiling on unused 2026 money moving into the 2027 plan year. What is still unpublished is the figure a year further out: how much will be allowed to carry from 2027 into 2028, which the IRS will set in the same revenue procedure as the 2027 contribution limit.
A plan may offer one or the other. It cannot offer both. Plenty of employees assume they have whichever one they last had at a previous employer, and discover otherwise in January. The place to check is your summary plan description, not the enrollment portal's headline figures.
Electing without the final number
Three defensible approaches, depending on what you are optimising for.
Elect at $3,400 and stop. The known 2026 ceiling is the largest figure that is certainly available, since every credible projection points upward rather than down. You cannot over-elect, nothing needs correcting later, and you forgo at most the $100 or so of extra room the projections suggest.
Elect your actual expected spend, if it is below $3,400. Most people's qualifying costs do not reach the ceiling, which makes the whole question academic. If you spent $1,900 on prescriptions, dental work and contact lenses last year, the unpublished limit is irrelevant to you and precision about your own spending matters far more.
Elect high and accept a correction. If your plan lets you revise after the IRS publishes, and your expected spend genuinely exceeds $3,400, electing at the projected $3,500 costs nothing but an administrative adjustment if the projection is wrong. A cafeteria plan cannot lawfully accept salary reductions above the statutory maximum, so an over-election is reduced by the administrator rather than penalised. Confirm your plan allows the revision before relying on this.
What to do before your deadline
- Find out which account you are actually being offered. General purpose, limited purpose and dependent care FSAs are three different things with three different rules, and the enrollment screen may not distinguish them clearly.
- If a high deductible plan is on the table, resolve the HSA question first. The FSA decision follows from it, not the other way around. Choosing a general purpose FSA forecloses the HSA for the year.
- Check whether your plan has a carryover or a grace period, and what happens to a 31 December balance.
- If you have childcare costs, revisit the $7,500. The figure changed, your habits may not have.
- Ask whether your employer permits an election change once the IRS publishes. This single answer determines which of the three approaches above is open to you.
- Base the amount on last year's actual qualifying spending, not on the ceiling. The ceiling is a cap, not a target, and the money you do not spend is the money you forfeit.
Your other open-enrollment elections run on their own timetables, and two of them are worth settling in the same sitting: the 401(k) and IRA contribution limits, where the 2027 figures are also pending and due on a similar schedule, and the deductible and out-of-pocket maximum on the plan itself, which decides far more of what you will actually pay than the FSA election does. If you are buying your own cover rather than taking an employer plan, the Marketplace open enrollment deadline is the one that binds.
When this page will change
The IRS publishes the health FSA limit as part of its annual inflation adjustments, historically in October or November. This page is scheduled for review on 30 November 2026 and will carry the published 2027 figures once Revenue Procedure guidance exists, not before. Until then, the only official number on this page is the 2026 one.
Sources
- IRS: IR-2025-103, tax inflation adjustments for tax year 2026 (opens in a new tab)
- IRS Publication 15-B: Employer's Tax Guide to Fringe Benefits (opens in a new tab)
- IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans (opens in a new tab)
- Thomson Reuters: Missing inflation month poses little risk to 2027 tax figures (opens in a new tab)
- Mercer: Marsh projects 2027 transportation and health FSA limits (opens in a new tab)
This article is general information for a United States audience and is not financial, tax or legal advice. The 2026 figures are those published by the IRS and were checked against IR-2025-103 and Publication 15-B on 20 October 2026. Figures described as projections are the published estimates of third-party benefits consultancies and are not IRS limits. Cafeteria plan terms, including whether a carryover or a grace period applies and whether elections may be revised, are set by your employer's plan document and vary. Confirm your own plan's rules with your benefits administrator, and the limits with the IRS, before acting on any of this. Last reviewed 20 October 2026.
