Notice & DisclosureAnnual
FSA Use-or-Lose / Grace Period / Rollover Notice
IRC § 125; IRS Notice 2005-42; IRS Notice 2013-71
Employers must notify participants of FSA forfeiture rules, whether a grace period (up to 2.5 months) or carryover applies, and the deadline to incur claims. Carryover limit is indexed annually by the IRS. Critical for ER-funded FSAs.
ResponsibleClient/Other TPA (compliance TPA)
Deliver ToParticipants with FSA elections
DeadlineBefore plan year start (with enrollment materials); reminder before deadline
Current Fee / Rate Information
FSA carryover limit for 2025 plan years: $660. For 2026 plan years: check IRS Revenue Procedure for updated limit (typically released in October/November). Grace period alternative: up to 2.5 additional months after plan year end.
Last reviewed: April 2026
Official Source
https://www.irs.gov/publications/p969Get Your Compliance Calendar →
Track this and 71 other federal requirements. Personalized to your plan.