Every December, workers abandon hundreds of millions of dollars in flexible spending account money — simply because they forgot the balance existed. The average forfeiture per person isn't huge, but it's your money, tax-free, sitting in an account with a hard expiration date.

If you're reading this before December 31, you still have time. Here's exactly how the deadline works, what your employer may have extended it to, and the highest-value ways to spend down an FSA balance you'd otherwise forfeit.

Try Expense Splitter — free, no sign-up.

The 30-Second Answer

The FSA deadline is December 31, 2026, unless your employer offers an extension — and there are only two kinds:

Grace period: you have until March 15, 2027 to incur new eligible expenses
Carryover: you can keep up to $680 of your 2026 balance into 2027

Your employer picks one or the other (or neither) — never both. Check your plan's summary plan description or ask HR which one you have before December 15, because the answer completely changes your strategy.

If you have a grace period, January purchases still count. If you have carryover, you only need to spend down to $680, not to zero. If you have neither, every unspent dollar above zero vanishes on New Year's Eve.

The 2026 Numbers That Matter

Contribution limit: $3,400 per year for a health FSA (up from $3,300 in 2025)
Carryover cap: $680 into 2027 (up from $660)
Dependent care FSA: $5,000 per household — separate account, separate rules, and no carryover at all in virtually all plans
Grace period length: 2.5 months (expenses through March 15, 2027)

One nuance people miss: the carryover doesn't count against next year's $3,400 limit. You can carry over $680 and contribute the full $3,400 in 2027.

Step 1: Find Your Real Balance

Log into your FSA administrator's portal (WageWorks/HealthEquity, FSAFEDS, Benefit Wallet, or whoever your card says) and check two numbers:

Available balance — what you can spend now
Pending substantiation — purchases you've made that haven't been processed yet

That second number matters. If you submitted a $200 reimbursement claim in November that's still processing, it's already spent. Buy against the available number, not the total, or you'll end up with an over-draw the administrator will claw back.

What's Actually Eligible (The Short List)

FSA-eligible purchases are broader than most people think, especially since the CARES Act made over-the-counter medications eligible without a prescription. The reliable categories:

Vision: prescription glasses, sunglasses, and reading glasses, contact lenses, contact solution
Dental: cleanings, fillings, braces and orthodontia, night guards, denture adhesive
OTC medications: pain relievers, allergy meds, cold and flu medicine, antacids, sleep aids — no prescription needed
Medical devices: thermometers, blood pressure monitors, first aid kits, crutches, knee braces
Sun protection: sunscreen SPF 15+ and SPF lip balm (yes, really)
Prescriptions: copays, insulin, and anything a doctor prescribes

Not eligible, despite urban legend: toothpaste, mouthwash (unless prescribed), vitamins for general health, cosmetics, gym memberships, and non-medicated shampoo. When in doubt, search the product on an FSA store — they mark eligibility clearly.

The Smartest Last-Minute Spends, Ranked

1. New glasses or prescription sunglasses

This is the single best FSA play because it converts expiring money into something you'd buy anyway. An eye exam plus a pair of prescription glasses typically runs $200–$400; prescription sunglasses (including the trendy ones) count if they have prescription lenses. Book the exam first — in December, appointment slots go fast, and an exam you schedule in December but attend in January usually doesn't count without a grace period.

2. Dental work you've been postponing

A cleaning, that cracked filling, or the night guard your dentist recommended two years ago — all eligible. If you need a bigger procedure (a crown runs $1,000+), December is the moment: pay this year's balance against it instead of letting it expire.

3. A deliberate medicine stockpile

Allergy meds ahead of spring, a full cold-and-flu kit, the kids' pain reliever in both child and teen strengths. A $150–$250 stockpile of things your household buys anyway is the definition of money well spent. Check expiration dates — buy quantities you'll genuinely use within a year or two.

4. The medical device upgrade

Replace the 15-year-old thermometer, get a proper blood pressure monitor, add a real first aid kit to the car. Unsexy, useful, fully eligible.

5. FSA store sweep

Sites like FSAstore.com, Amazon's FSA shop, and Walmart's FSA section sell only eligible items, and your FSA card works on them directly. This is the efficient endgame: whatever balance remains in mid-December, sweep it into eligible consumables.

The Tax Math: Why Forfeiting $400 Really Costs More

An FSA contribution skips federal income tax and the 7.65% FICA tax. For a worker in the 22% federal bracket, every $1,000 contributed saves roughly $295 in taxes. Flip that around: forfeiting $400 of FSA money doesn't just lose $400 — you had to earn about $565 pre-tax to have $400 left over after that bracket's taxes.

Want to see your own numbers? A take-home pay calculator shows your marginal bite, and a budget calculator helps you plan predictable medical spending for next year — which is the whole game: contribute only what you can forecast.

Rule of thumb for 2027 enrollment: your realistic annual spend on glasses, dental copays, prescriptions, and OTC meds, plus a $200 buffer for surprises. If that total is under $680, the carryover makes an FSA nearly risk-free — worst case, you roll the excess forward.

FSA vs. HSA: The Only Difference That Matters

A health savings account (HSA) rolls over forever, invests like a retirement account, and stays yours if you change jobs. An FSA is use-it-or-lose-it and generally tied to your employer. The HSA is the better long-term vehicle if you're on a high-deductible plan — but you can't have both a general-purpose FSA and an HSA at the same time.

If your medical spending is lumpy and unpredictable, an emergency fund calculator is the honest tool for that job, with the FSA covering only the predictable layer.

A December 15 Action Checklist

Check available balance and pending claims
Confirm with HR: grace period, carryover, or neither
Book the eye exam and dental cleaning this week
Total your planned purchases; anything unspent goes to an FSA-store sweep by December 20 (shipping delays are real in late December)
Keep every receipt — card purchases can still get flagged for substantiation

FAQ

When is the FSA deadline for 2026?

December 31, 2026 is the default use-it-or-lose-it date. If your employer offers a grace period, you have until March 15, 2027 to incur new expenses; if it offers carryover, up to $680 moves into 2027 automatically.

How much can I carry over from my FSA in 2026?

Up to $680 (the 2026 IRS cap, up from $660 in 2025) — but only if your plan includes the carryover option. The carryover does not reduce your 2027 contribution limit of $3,400.

What happens to unspent FSA money?

Your employer keeps it, after possibly using a portion for plan administration. You do not get it back as cash or a W-2 adjustment. That's why a December spending sweep beats a January regret.

Can I buy sunscreen with FSA money?

Yes — sunscreen and lip balm with SPF 15 or higher are FSA-eligible without a prescription. Toothpaste, regular cosmetics, and general-health vitamins are not.

Is it better to have an FSA or an HSA?

An HSA (only available with a high-deductible health plan) rolls over indefinitely and is portable between jobs — better if you can qualify. An FSA works for predictable expenses on traditional plans; just size the contribution to what you'll actually spend.

Does a dependent care FSA have the same deadline rules?

No — dependent care FSAs almost never allow carryover, and most have only a short claims-filing period after year end. Any unspent dependent care balance is lost, so spend it down fully.