2027 health FSA limit: $3,500, carryover $700 (the math is settled)

The short answer. The confirmed 2026 health flexible spending arrangement (FSA) salary-reduction limit is $3,400, set by the IRS in Revenue Procedure 2025-32. Because the cap is indexed to inflation and rounded down to the nearest $50, it moves in clean $50 steps, which means the 2027 limit lands at $3,500, with a $700 carryover, now that the August 2026 inflation reading has closed the window. The IRS still has to publish it formally, around October or November 2026, and this page will be updated when it does; for open-enrollment elections, $3,500 is the number to plan around.

Update, September 13, 2026: The August 2026 chained CPI, published September 11, closed the twelve-month window at an average of 182.857; the unrounded 2027 figure is $3,516, so the $3,500 cap and $700 carryover are now arithmetic awaiting the IRS revenue procedure rather than a projection, and the IRS 2027 inflation adjustments tracker marks them decided.

Update, September 6, 2026: With C-CPI-U data now published through July 2026, the indexed 2027 health FSA limit works out to $3,515 before rounding, which rounds down to the nearest $50 to $3,500 — not the middle of a range, but the figure the math currently points to. The carryover maximum, set at 20% of the salary-reduction limit, follows to $700. Only a genuinely sharp move in the August C-CPI-U reading — a drop of roughly 4.7% in a single month — would pull the unrounded figure back under $3,450 and change the outcome. The August number publishes September 11, alongside every other indexed 2027 figure tracked on our IRS 2027 inflation adjustments tracker.

What the 2026 limit actually is

A health flexible spending arrangement, almost always shortened to FSA, lets an employee set aside pre-tax salary to pay for qualified medical expenses such as copays, prescriptions, and out-of-pocket care. The amount you can route into that account each year is the salary-reduction limit, and for 2026 the IRS has fixed it at $3,400. That figure is confirmed, published in Revenue Procedure 2025-32, and it represents a $100 increase over the $3,300 cap that applied in 2025.

There is a second number worth keeping in view. If your employer’s plan allows a carryover of unused funds into the following year, the maximum 2026 carryover is $680. That carryover is the narrow exception to an FSA’s defining feature, which is that it is mostly use-it-or-lose-it. Money you set aside and do not spend, beyond the permitted carryover, generally disappears at year-end, so the contribution decision is one you want to size carefully rather than max out reflexively.

How the cap is indexed and rounded

The reason the FSA limit behaves so predictably comes straight from the statute. The salary-reduction limit is set under Internal Revenue Code section 125(i) and adjusted for inflation each year. The inflation measure is not the headline consumer price index you see in the news but the chained Consumer Price Index for All Urban Consumers (C-CPI-U), a version that accounts for how people substitute between goods as prices change and that the IRS uses across many of its annual adjustments.

The second half of the mechanism is the rounding. After the inflation adjustment is applied, the result is rounded down to the nearest $50. That single rule explains almost everything about how this number behaves: it is why the cap never lands on an odd figure like $3,427, why it moves in tidy $50 steps, and why it tends to rise by $50 or $100 in a given year rather than by some irregular amount. The carryover maximum follows from the same arithmetic, set at 20% of the salary-reduction limit and then rounded as well, which is how the 2026 carryover arrives at $680 against a $3,400 base.

Why 2027 is a range, not a single number

Once you understand the $50-step mechanism, the 2027 projection follows naturally. Starting from the confirmed 2026 base of $3,400 and applying a year of inflation indexing through the C-CPI-U data published so far, the 2027 health FSA limit works out to $3,500 — the unrounded figure comes to $3,515, which rounds down to the nearest $50. It is worth being precise about how firm that is. The figure is not yet confirmed by the IRS, but it would take a roughly 4.7% single-month drop in the August C-CPI-U reading to pull the unrounded number back under $3,450, which makes $3,500 the number to plan around rather than one end of an open range.

Presenting the pre-July math as a range was the honest treatment before the data existed to narrow it, and the shape of the outcome is still the useful takeaway even now that one input has firmed up: the increase is one or two $50 steps above the current cap, not a dramatic jump and not a cut. For anyone planning open enrollment, that narrowness is the information that matters, because it tells you the 2027 ceiling will sit just slightly above where 2026 sits — and, on the data available today, at $3,500 specifically.

The official number arrives on a predictable calendar. The IRS typically confirms the next year’s inflation-adjusted benefit limits in the fall, generally around October or November, which means the 2027 health FSA figure should be published around October or November 2026. Until then, treat $3,500 as the planning number rather than a hedge — only a sharp drop in the August print would move it, and that print lands September 11.

Planning around the limit

The practical reason to track this number closely is that an FSA’s mostly use-it-or-lose-it design rewards a contribution figure that matches your expected spending rather than the maximum the law allows. Electing the full cap makes sense if you can confidently forecast that much in qualified expenses; otherwise you are exposing dollars to forfeiture beyond the carryover. Knowing that the 2027 ceiling will rise only modestly, by one or two $50 steps, helps you plan that election without waiting anxiously for a surprise.

The same fall enrollment form usually carries the commuter benefit election, whose 2027 cap is set by the same August-ending index and already works out to $350 a month for transit and for parking (the 2027 commuter limit). The dependent care FSA on the same form works differently: its $7,500 cap comes from section 129, which has no inflation clause, so it does not move in 2027 (dependent care FSA limit 2027).

It also helps to place the FSA limit in context against the other tax-advantaged health account most people encounter. The FSA cap is separate from, and much lower than, the health savings account (HSA) limit, and the two accounts differ in a way that matters for planning: an FSA is the employer’s account and is mostly use-it-or-lose-it apart from the limited carryover, whereas an HSA is yours to keep and roll forward indefinitely. That contrast is the heart of the decision, and it is worth reading through the full comparison of how the FSA compares with an HSA before you lock in an election. Because eligibility for an HSA depends on the kind of plan you carry, it is also worth understanding the health-plan choice around these accounts, since the type of coverage you select determines which of these accounts is even available to you.

One quirk of the IRS calendar is worth knowing while you wait: not every 2027 limit is still a projection. The 2027 HSA limits are already official — the IRS publishes those in May, more than a year ahead — while the FSA cap here and the 2027 401(k) and IRA limits stay in projection territory until the fall announcements. If you are mapping out all of next year’s ceilings at once, those two companion pages carry the same math-first treatment as this one.

None of this changes the bottom line on the headline question. The 2026 health FSA limit is a confirmed $3,400, the indexing-and-rounding machinery puts the 2027 figure at $3,500, and the IRS will turn that projection into a confirmed number in the fall of 2026. The math does the heavy lifting; the only thing left to wait on is the official rounding.