Understanding FSA Deadline Extensions: 6 Facts from FSA Store®

Experts clarify misconceptions to help FSA account holders avoid forfeiting unused funds

Jan. 28, 2026 at 9:31am

Got story updates? Submit your updates here. ›

According to FSA Store® experts, approximately 70% of people enrolled in FSAs have some type of deadline extension, but low understanding of how deadlines and eligibility work leads nearly half of these individuals to forfeit an average of $463 in unused funds each year. To reverse this trend, FSA Store® addresses common misconceptions about the March 15 grace period deadline, the FSA carryover, and FSA eligibility in a list of six facts all FSA users should know.

Why it matters

Flexible Spending Accounts (FSAs) provide valuable tax savings, but the potential for forfeiting unused funds by missing deadlines is a common issue. Understanding the nuances of FSA deadlines and eligibility rules can help consumers maximize the benefits of their pre-tax health accounts.

The details

FSA Store® experts clarify that while most FSA funds expire at the end of the plan year, employers may offer a grace period or a carryover option to give account holders more time to spend down funds. However, the rules around these deadline extensions can be confusing, with employers not required to offer both a grace period and a carryover. Additionally, certain FSA-eligible expenses may require additional documentation like a Letter of Medical Necessity. FSA Store® provides tools and resources to help consumers navigate these complexities and avoid forfeiting unused funds.

  • The most common FSA deadline is December 31.
  • A grace period gives account holders an extra 2.5 months after the plan year end date, typically making the grace period deadline March 15 of the new year.
  • A runout period is a timeframe, usually 90 days, after the plan year ends during which claims for prior-year expenses can be submitted for reimbursement.

The players

FSA Store®

The first and leading online store dedicated to selling only products and services that can be paid for with tax-free flexible spending account (FSA) funds.

Rachel Rouleau

Chief compliance officer for Health-E Commerce®, the parent brand of FSA Store®.

Got photos? Submit your photos here. ›

What they’re saying

“While no one likes deadlines, it's important to understand that the potential tax savings of an FSA outweigh the risk of forfeiture.”

— Rachel Rouleau, Chief compliance officer (FSA Store®)

What’s next

To avoid forfeiting FSA funds, consumers should check their balance and deadline, use FSA Store® tools to align spending with remaining funds, and consult the FSA Eligibility List™ to ensure expenses are eligible.

The takeaway

Understanding the nuances of FSA deadlines and eligibility rules is crucial for consumers to maximize the tax-saving benefits of their flexible spending accounts and avoid forfeiting hundreds of dollars in unused funds each year.