how much of my fsa can i roll over to 2025

2 min read 02-12-2024

how much of my fsa can i roll over to 2025

Meta Description: Wondering how much of your Flexible Spending Account (FSA) you can roll over to 2025? This comprehensive guide explains FSA rollover rules, deadlines, and exceptions, helping you understand your options and maximize your healthcare savings. Learn about the differences between health FSAs and dependent care FSAs and how rollover rules apply to each. Don't lose your hard-earned money – plan ahead!

Understanding FSA Rollovers: Health and Dependent Care

A Flexible Spending Account (FSA) lets you set aside pre-tax dollars to pay for eligible healthcare or dependent care expenses. However, the rules surrounding rollovers differ significantly between health FSAs and dependent care FSAs.

Health FSA Rollovers: The 2025 Update

The general rule: Prior to 2020, you couldn't roll over funds from your health FSA to the next year. This changed with the passage of the Consolidated Appropriations Act, which allowed for a limited rollover amount.

The catch: Under current law, you can only roll over up to $610 to your 2025 health FSA. This is a set amount, and it does not depend on how much you contributed to your 2024 account.

Important Dates: Your employer's deadline for using your 2024 health FSA funds might differ, but the general rule is to use any remaining funds within two and a half months after the end of your plan year. Check with your plan administrator for your plan's specific deadline.

What if I have more than $610 left? Unfortunately, any amount above the $610 limit will be forfeited. Plan carefully to avoid losing any of your pre-tax dollars.

Dependent Care FSA Rollovers: No Rollover Option

Unlike health FSAs, dependent care FSAs generally do not allow for any rollovers. Any unused funds in your 2024 dependent care FSA will be forfeited. It's crucial to accurately estimate your childcare expenses to avoid losing your contributions.

How to Maximize Your FSA Benefits

Accurate Budgeting: Carefully estimate your healthcare and childcare expenses for the year.
Mid-Year Adjustments: Some employers allow for mid-year adjustments to your FSA contributions. This can help avoid forfeiting unused funds.
Review Your Plan Documents: Always refer to your specific employer's FSA plan documents for detailed rules and deadlines. These documents provide the most accurate information about your plan specifics.

Frequently Asked Questions (FAQs)

Q: What if I change employers? Your FSA will likely end when your employment ends. You'll need to use the remaining funds or forfeit them according to your plan's rules.

Q: Can I roll over unused funds from a previous year's health FSA? No, this is only allowed for the limited amount ($610 in 2024-2025) between consecutive years.

Q: What are eligible expenses for a health FSA? Check with your plan administrator for a complete list, but generally, this includes co-pays, deductibles, certain over-the-counter medications, and other medical expenses.

Q: What happens if I don't use all my FSA funds by the deadline? You'll forfeit any unused amount exceeding the rollover limit (for health FSAs).

Conclusion

Understanding your FSA rollover options is essential for maximizing your savings. By carefully planning your healthcare and dependent care expenses and familiarizing yourself with your employer’s plan rules and deadlines, you can avoid unnecessary losses and make the most of your pre-tax dollars in 2025. Remember that the $610 rollover for health FSAs is a valuable benefit, but careful planning is essential to utilize it effectively. Always check with your employer's plan administrator for the most up-to-date and accurate information.