Health FSA is not an HSA
A health flexible spending arrangement is a cafeteria-plan salary reduction under IRC §125(i). For taxable years beginning in 2026, IRS Revenue Procedure 2025-32 §2.15 sets the dollar limit at $3,400.
If — and only if — the plan permits a carryover of unused amounts, the same procedure caps that carryover at $680. Many plans are still use-it-or-lose-it.
This is not an HSA (Pub 969) and not a dependent-care FSA (IRC 129, $7,500).
remaining = max(0, 3,400 − YTD)
Hero: $1,200 already elected
| Line | Amount |
|---|---|
| 2026 salary-reduction cap | $3,400 |
| Already elected (YTD) | $1,200 |
| Room left | $2,200 |
| Max carryover if the plan allows it | $680 |
Other scenarios
| YTD | Room | Over the cap |
|---|---|---|
| $0 | $3,400 | $0 |
| $1,200 | $2,200 | $0 |
| $3,400 | $0 | $0 |
| $4,000 | $0 | $600 |
Related: HSA contribution, dependent-care FSA, paycheck take-home.
Frequently asked questions
What is the 2026 health FSA cap?
$3,400 in salary reductions (IRC §125(i), Rev. Proc. 2025-32). $1,200 already elected leaves $2,200.
Can I carry unused money over?
Only if the plan allows it. The 2026 federal carryover cap is $680. Many plans are use-it-or-lose-it.
Is this an HSA or a dependent-care FSA?
No. HSA (Pub 969) and dependent-care FSA (IRC 129, $7,500) are separate tools.
What happens if I elect more than $3,400?
The excess is over the cap: electing $4,000 puts $600 over the 2026 limit.
Federal §125(i) dollar limits only. Your plan document still controls grace periods and carryover. Not tax advice.