--- url: https://thresholds.pages.dev/fsa/dependent-care/ title: "Dependent Care FSA: the 2026 Rules" updated: 2026-09-07 site: Thresholds sources: - https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm - https://www.irs.gov/publications/p503 - https://www.govinfo.gov/content/pkg/FR-2007-08-06/html/E7-14827.htm - https://www.irs.gov/irb/2013-47_IRB - https://www.irs.gov/irb/2005-23_IRB --- # Dependent Care FSA: the 2026 Rules The dependent care FSA limit is $7,500 for 2026, or $3,750 on a separate return. Congress set it in statute, it is not indexed, and there is no carryover. The dependent care FSA exclusion limit is $7,500 ($3,750 if married filing separately) from 2026. Congress set it in statute, so it is not indexed. A dependent care FSA cannot offer a carryover; a grace period is permitted. The [FSA deadline calculator](/fsa/#fsa-kind-h) treats a dependent care account as its own kind, because two of the three health FSA escape routes do not exist here. ## The number and where it came from Public Law 119-21 §70404 amended §129(a)(2)(A) of the Code, and §70404(b) applies the change "to taxable years beginning after December 31, 2025." The new figure is $7,500 ($3,750 if married filing separately). Two features of that sentence do the work. It is a statutory dollar amount, not a figure the IRS sets each autumn, so no revenue procedure adjusts it. And §129 contains no inflation-adjustment clause for it, which is why there is no October announcement to wait for. It stays where it is until Congress moves it. That is the opposite of the health FSA salary-reduction limit, which is $3,400 for a plan year beginning in 2026 and is indexed every year. The two limits are separate and neither offsets the other; both are set out on the [health FSA limits page](/fsa/limits/). One consequence for anyone reading the IRS site directly: Publication 503 on irs.gov is the edition for tax year 2025 and still shows the earlier figure. The statute, not the publication, is the current authority. ## The cap is on the return, not the person Section 129(a)(2)(A) states one amount, with half that amount "in the case of a separate return by a married individual". A married couple filing jointly therefore has one shared figure rather than one each. Publication 503 lists five ceilings, and the exclusion is the smallest of them: the benefits you received, the qualified expenses you incurred, your earned income, your spouse's earned income, and "the maximum amount allowed under your dependent care plan." The third and fourth are the ones people trip on. If a spouse has no earned income for the year, the exclusion is limited by that figure, whatever was elected. Your employer reports the benefits in box 10 of Form W-2, and anything above the excludable maximum is added to the wages in box 1. ## No carryover, and no uniform coverage either A dependent-care FSA cannot offer a carryover. The carryover created by Notice 2013-71 applies to health FSAs, and the general rule in Prop. Treas. Reg. §1.125-5(c)(1) still governs everything else: "No contribution or benefit from an FSA may be carried over to any subsequent plan year or period of coverage." A second health FSA protection is also missing here. Prop. Treas. Reg. §1.125-5(d)(5) states that the uniform coverage rule "applies only to health FSAs and does not apply to FSAs for dependent care assistance or adoption assistance." That changes the cash flow. A health FSA must make your whole election available in January. A dependent care FSA reimburses only what has actually been withheld from your pay so far, so a large January invoice is reimbursed over the following months rather than at once. ## A grace period is allowed Prop. Treas. Reg. §1.125-1(e)(1) names dependent care assistance among the benefits a grace period may cover. Where the plan provides one, the outer limit is the same 2½ months — the 15th day of the 3rd month after the plan year ends that applies to a health FSA. The money keeps its identity through the grace period. Notice 2005-42 states that "unused amounts elected to pay or reimburse medical expenses in a health flexible spending arrangement (FSA) may not be used to pay or reimburse dependent care or other expenses incurred during the grace period," and the reverse holds equally. | Feature | Health FSA | Dependent care FSA | |---|---|---| | Annual limit | $3,400 for a plan year beginning in 2026, indexed | $7,500 ($3,750 if married filing separately), set by statute and not indexed | | Carryover | Up to a capped amount, if the plan offers one | Not available | | Grace period | Up to 2½ months — the 15th day of the 3rd month after the plan year ends, if the plan offers one | Up to 2½ months — the 15th day of the 3rd month after the plan year ends, if the plan offers one | | Full election available from day one | Yes, under the uniform coverage rule | No | ## The credit runs on the same money Money excluded through a dependent care FSA cannot also produce a child and dependent care credit. Publication 503: "If you received dependent care benefits that you exclude or deduct from your income, you must subtract that amount from the dollar limit that applies to you." The subtraction happens on Form 2441, Part III. Publication 503 also notes the flat rule for the medical deduction: "Amounts excluded from your income under your employer's dependent care benefits plan can't be used to claim a medical expense deduction." ## How much can I contribute to a dependent care FSA in 2026? Up to $7,500 ($3,750 if married filing separately), subject to whatever lower maximum your plan sets. Public Law 119-21 §70404 set that figure in §129(a)(2)(A) for taxable years beginning after December 31, 2025. ## Can dependent care FSA money carry over? No. A dependent-care FSA cannot offer a carryover — the option Notice 2013-71 created is for health FSAs, and Prop. Treas. Reg. §1.125-5(c)(1) forbids carrying any other FSA benefit into a later plan year. A grace period is the only extension available. ## Can each spouse contribute the full dependent care limit? No. Section 129(a)(2)(A) states one amount for the return, and a separate return by a married individual is limited to half of it. Two spouses filing separately cannot exclude more between them than one joint return could. ## Does the dependent care FSA limit rise with inflation? No. The figure sits in the statute with no inflation-adjustment clause attached, so it does not change with the annual IRS revenue procedure that moves the health FSA limit. ## Can I use a dependent care FSA and the child and dependent care credit? Both can appear on one return, but not on the same dollars. Publication 503 requires you to subtract the excluded benefits from the dollar limit of expenses that the credit is figured on. ## Can I be reimbursed before my contributions are in? No. Prop. Treas. Reg. §1.125-5(d)(5) excludes dependent care FSAs from the uniform coverage rule, so reimbursement is limited to the amount already contributed to the account. ## What happens to money I do not spend? It is forfeited at the end of the plan year, or at the end of a grace period where the plan offers one. The [use-it-or-lose-it rule](/fsa/use-it-or-lose-it/) covers what the employer may then do with it. ## Figures on this page - $7,500 ($3,750 if married filing separately) — Dependent-care FSA exclusion limit from 2026 — permanent and not inflation-indexed. (P.L. 119-21 §70404, amending IRC §129(a)(2)(A) (govinfo); verified 2026-09-07) - A dependent-care FSA cannot offer a carryover — The carryover option is available to health FSAs only. (IRS Notice 2013-71 §III; verified 2026-09-06) - 2½ months — the 15th day of the 3rd month after the plan year ends — The maximum grace period a cafeteria plan may offer; a December 31 plan year gives March 15. (IRS Notice 2005-42 / Prop. Treas. Reg. §1.125-1(e); verified 2026-09-06) - $3,400 — Health FSA salary-reduction limit for plan years beginning on or after 2026-01-01. (Rev. Proc. 2025-32 (issued 2025-10-09); verified 2026-09-06; applies 2026-01-01 to 2026-12-31) ## Sources - [Public Law 119-21 §70404 — enhancement of the dependent care assistance program (amending IRC §129(a)(2)(A))](https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm) - [IRS Publication 503 — Child and Dependent Care Expenses (dependent care benefits)](https://www.irs.gov/publications/p503) - [Prop. Treas. Reg. §1.125-1(e) and §1.125-5(c), (d)(5) — proposed section 125 regulations, Federal Register, August 6, 2007](https://www.govinfo.gov/content/pkg/FR-2007-08-06/html/E7-14827.htm) - [IRS Notice 2013-71, Internal Revenue Bulletin 2013-47 (the carryover is a health FSA option)](https://www.irs.gov/irb/2013-47_IRB) - [IRS Notice 2005-42, Internal Revenue Bulletin 2005-23 (grace period; one benefit at a time)](https://www.irs.gov/irb/2005-23_IRB) --- Information, not advice. Figures verified 2026-09-07. https://thresholds.pages.dev/fsa/dependent-care/