2027 FSA Limits — $3,500 Health FSA, $700 Carryover, $7,500 Dependent Care

The IRS published the 2027 health FSA limits on November 5, 2026 in Revenue Procedure 2026-35 (news release IR-2026-133). The health FSA salary-reduction cap rises to $3,500, and the most a plan can let you carry over rises to $700. Most employer open enrollment windows for January 1 plans close in November or early December, so this is the number to use when you pick your 2027 election.

2026 vs 2027 FSA limits

Item	2026	2027	Source
Health FSA employee salary reductions	$3,400	$3,500	Rev. Proc. 2025-32 §3.15 / Rev. Proc. 2026-35 §3.16
Health FSA maximum carryover (if the plan allows it)	$680	$700	Same sections
Dependent care FSA (per household)	$7,500	$7,500	IRC §129(a)(2)(A)
Dependent care FSA (married filing separately)	$3,750	$3,750	IRC §129(a)(2)(A)

The health FSA limit rose $100 and the carryover cap rose $20. The dependent care limit is a fixed dollar amount in the law: the Working Families Tax Cuts raised it from $5,000 to $7,500 starting in tax year 2026, and it is not adjusted for inflation, so 2027 is the same.

Your employer can offer a lower health FSA cap than $3,500, but not a higher one. The cap applies to what you elect from pay; employer flex credits you cannot take as cash generally do not count against it.

How much to elect for 2027

A health FSA is use-it-or-lose-it, so the goal is to elect what you are fairly sure to spend, not the maximum. A simple way to size it:

1. Add up predictable 2027 costs: copays for regular prescriptions and visits, planned dental work, glasses or contacts, and over-the-counter medicines and supplies you buy anyway.
2. Subtract anything an insurer will reimburse.
3. If your plan has a $700 carryover, you can lean slightly higher, because up to $700 of leftover money rolls into 2028 instead of being forfeited.
4. Cap the result at $3,500 (or your employer’s lower limit).

Illustrative example (made-up numbers): you expect $1,200 in prescription copays, $900 for a crown after insurance, and $400 for contacts, so $2,500 total. Electing $2,500 sets aside $2,500 of pay before federal income tax and FICA. At a 22% federal bracket plus 7.65% FICA, that is roughly $740 less tax than paying the same bills with after-tax money. State tax savings depend on your state.

Run your paycheck with and without the election in the paycheck calculator to see the take-home change (the calculator models federal tax and FICA, not your plan’s FSA rules).

Don’t forfeit 2026 money

Before you worry about 2027, check your 2026 balance. Depending on your plan:

• Carryover plan: up to $680 of unused 2026 money moves into 2027. Anything above that is lost.
• Grace period plan: you get extra time after the plan year ends (up to 2½ months, so March 15, 2027, for a calendar-year plan) to incur expenses against 2026 money.
• Neither: money not used by December 31, 2026, is forfeited.

Plans also have a claims run-out deadline for submitting receipts, often in the first few months of the next year. Look it up now so a paid bill doesn’t get stranded.

Health FSA vs HSA

If you’re choosing a 2027 medical plan at the same time, the accounts don’t stack the way people expect:

• A general-purpose health FSA generally blocks HSA contributions for that period, even if you’re on a high-deductible plan.
• A limited-purpose FSA (dental and vision only) usually works alongside an HSA.
• The 2027 HSA limits are $4,500 self-only and $9,000 family. See 2027 HSA contribution limits for the full table and HDHP deductible tests.

HSA money never expires and can be invested; FSA money is available in full on day one of the plan year but generally expires. Many people on a high-deductible plan pick the HSA plus a limited-purpose FSA.

Dependent care FSA notes

• The $7,500 limit is per household, not per parent. Two spouses with separate employer plans still share one $7,500 cap.
• You can’t use the same expenses for both the dependent care FSA exclusion and the Child and Dependent Care Credit; excluded benefits reduce the expenses that count for the credit.
• Dependent care money is reimbursed as you incur care costs, not front-loaded like a health FSA.

Other 2027 benefit figures from the same release

Rev. Proc. 2026-35 also sets the 2027 commuter limits at $350 a month for transit and $350 a month for qualified parking (§3.18), and the educational assistance exclusion at $5,400 (§3.17). For the 2027 brackets and standard deduction from the same document, see 2027 tax brackets.

Related reading

• 2027 HSA contribution limits — $4,500 / $9,000, HDHP floors, and open-enrollment notes
• 2027 tax brackets and standard deduction — Rev. Proc. 2026-35; $16,600 single / $33,200 joint
• ACA open enrollment 2027 — Marketplace deadlines if you’re not on an employer plan
• Take-home pay after federal tax and FICA — how pretax deductions change your paycheck
• Paycheck calculator — compare take-home pay with and without your 2027 election
• HSA calculator — leftover HSA room if you pair a limited-purpose FSA with an HSA

What this does not do

• It does not replace Rev. Proc. 2026-35, IRS Publication 969, or your employer’s plan documents.
• It does not tell you whether your plan offers carryover, a grace period, or a limited-purpose FSA.
• Educational only, not tax, benefits, or legal advice.

FAQ

What is the 2027 health FSA limit?

$3,500 for plan years beginning in 2027 (Rev. Proc. 2026-35 §3.16).

What is the 2027 FSA carryover limit?

$700, if your plan allows carryover.

Did the dependent care FSA limit change for 2027?

No. It stays $7,500 per household ($3,750 married filing separately).

Is the health FSA limit per person?

Yes, per employee. Spouses with their own employer FSAs each get their own limit.

Can I change my FSA election mid-year?

Generally only after a qualifying life event such as marriage, birth, or a change in employment, and only as your plan allows. Treat your open enrollment election as locked for the year.