The $680 FSA Carryover Is the Limit for Plan Years Beginning in 2026 — Not the Amount Rolling Into 2026

Guides to the FSA carryover often put two numbers side by side — $660 and $680 — and it is easy to come away unsure which one applies to you. The revenue procedure removes the ambiguity with a single opening clause.^[1]

The text reads: "For taxable years beginning in 2026, the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,400. If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $680."^[1][2]

So $680 is attached to the plan year that begins in 2026 — it caps what can move from that year into the next one. It is not the figure that carried into 2026 from the year before. The two numbers describe different plan years, which is why they are easy to swap.^[1]

The sentence is conditional, and the condition is doing real work. The limit applies "if the cafeteria plan permits the carryover of unused amounts."^[1]

The IRS sets a ceiling; it does not grant the carryover. Whether any carryover exists at all is a feature of the employer's plan — so "the FSA carryover is $680" is a statement about the maximum, not about what every participant has.^[1]

The same section also fixes the contribution side: $3,400 in salary reductions for taxable years beginning in 2026. The contribution limit and the carryover limit are separate figures in the same paragraph, and both are keyed to that same plan-year language.^[1][2]

The adjustment sits in Rev. Proc. 2025-32, which the Bulletin describes as modifying certain sections of Rev. Proc. 2024-40 to reflect amendments to the Internal Revenue Code by Public Law 119-21 (July 4, 2025).^[2]

It is an annual inflation-adjustment document, not an FSA-specific rule — the cafeteria plan figures appear as section 4.15 among many other 2026 adjusted items. The neighbouring section 4.16 sets the qualified transportation fringe benefit monthly limitation at $340.^[1]

That context matters when checking a number. Because these limits are re-issued each year in a new revenue procedure, a figure quoted without its revenue procedure number and its "taxable years beginning in" year cannot be pinned to a plan year — which is how $660 and $680 end up in the same paragraph elsewhere.^[1][2]

The two pages above are both from the IRS. One part of this can be checked against the statute. 26 U.S.C. § 125(i)(1) says a health FSA benefit is not a qualified benefit unless the plan provides that an employee "may not elect for any taxable year to have salary reduction contributions in excess of $2,500 made to such arrangement." § 125(i)(2) then requires that figure to be adjusted: for any taxable year beginning after December 31, 2013, the dollar amount "shall be increased by" the cost-of-living adjustment determined under section 1(f)(3).^[3]

Two things in that text line up with what this page says. First, the statute is written in terms of "any taxable year" and "taxable year beginning after" — the same taxable-year framing that makes $680 belong to the plan year beginning in 2026 rather than to a calendar date. Second, the statute explains why these numbers move in uneven steps: "If any increase determined under this paragraph is not a multiple of $50, such increase shall be rounded" — the rounding rule is in the law, not an IRS choice made each year.^[1][3]

But note carefully what § 125(i) does and does not set. It caps salary reduction contributions — the $3,400 side. It does not set the $680 carryover limit. The carryover figure comes from the revenue procedure, and the carryover itself exists only if the employer plan provides for it, as this page states above. So the statute corroborates the contribution limit and the taxable-year framing, not the $680 itself.^[1][3]