Deadlines
FSA grace period vs carryover vs run-out
They sound interchangeable and they are not: one moves the date you can spend, one moves the money, and one only moves the paperwork. Getting them confused is the most common way an FSA balance is lost.
Last reviewed October 2026. General information for out-of-network therapists, not legal or billing advice. Payer rules change — confirm with the payer before you bill.
Try the free check first. It runs entirely in your browser, takes about three minutes, and never uploads client data.
Run a free checkThe comparison, in one table
Read the first column as "what the rule moves". A plan can offer a carryover or a grace period — not both — and the run-out period is a separate, plan-set window that can exist alongside either.
| Rule | What it moves | Who sets it | Last day it creates |
|---|---|---|---|
| Carryover | The money | Employer, up to $680 for a 2026 plan year | No new date — it decides what survives the plan-year end |
| Grace period | The spend date | Employer, up to 2½ months after the plan-year end | The 15th day of the 3rd month after the plan-year end |
| Run-out | The submit date | Employer (the IRS sets no default) | A plan-set date (often roughly 60–90 days after the plan-year end in practice, but that is common practice, not a rule) |
What each rule actually does
A grace period lets you incur new expenses after the plan year ends. If your plan year ended December 31, 2026, a 2½-month grace period runs to March 15, 2027: a session on that day can still be paid from the 2026 balance. Nothing carries into 2027.
A carryover does the opposite. The spend deadline stays at the plan-year end, but part of the balance is moved into the next plan year and can be spent there. The maximum is set by the IRS each autumn and can be reduced by the employer.
A run-out period does neither. It only lets you submit claims for expenses you already incurred before the spend deadline. It is a paperwork window, so a claim submitted in it is still paid from the old plan year — and the balance that carries over is calculated after it closes.
The timeline of a plan year that ends December 31
Take a calendar-year plan: it began January 1, 2026 and ends December 31, 2026. The three rules put their deadlines in three different places on that line:
- Plan-year end, December 31, 2026: the last day to incur expenses under a carryover or "neither" plan.
- Grace period, March 15, 2027: the last day to incur expenses if the plan offers 2½ months instead.
- Run-out: somewhere after the plan-year end, set by the plan document (often roughly 60–90 days in practice, but that is common practice, not a rule). Only claims for expenses already incurred.
Worked example: a plan year that ends June 30
Not every plan year is a calendar year. If yours began July 1, 2025 and ends June 30, 2026, a 2½-month grace period runs to September 15, 2026 — not to September 30, and not to the end of the third full month. The rule is the 15th day of the third calendar month after the plan-year end.
A run-out period on the same plan would start after June 30, 2026 and, if the plan follows the common practice of roughly 60–90 days (not an IRS rule), would end in late August or September. The carryover, if the plan has one, is whatever is left after that run-out closes.
Why a plan cannot have both
Notice 2013-71 allows a plan to amend for a carryover only if it does not also provide a grace period for the same plan year. The two are alternatives, so a plan document that mentions both is either describing different years or is out of date.
If you are told "we have a grace period and you can roll over what is left", ask which one applies to your plan year in writing. The answer changes both the spend deadline and whether the money survives.
The mistake that costs the most money
The expensive confusion is between the run-out and the grace period. A run-out period feels like extra time to spend, and it is not: an expense incurred after the spend deadline is not reimbursable from the old balance, no matter when you submit it.
The second most expensive mistake is assuming a carryover is automatic. It is an optional plan feature. If your plan has neither rule, the plan-year end is the last day for everything, and the run-out period only decides how long you have to send in the receipts for expenses you already had.
Put your own dates in
The FSA deadline checker asks for the plan-year end, the rule your employer offers, the carryover cap and — if you know it — the run-out date. It returns the last day to incur expenses, the last day to submit claims, and the amount that would carry over versus the amount at risk.
If you are not sure which rule your plan has, choose "Not sure" and the checker shows both scenarios side by side instead of picking one for you. Everything runs in your browser; nothing you enter leaves it.
This is general information, not tax or benefits advice. Your plan document (SPD) and your FSA administrator set the real deadlines, and they may be shorter than the maximums above — confirm with the payer before you rely on one.
What the free check catches
- CPT vs. session length (90832 = 16–37 min, 90834 = 38–52, 90837 = 53+, nothing under 16)
- Telehealth POS 02 / 10 vs. POS 11, and modifier 95 pairing
- Diagnosis pointers A–D that don’t resolve to a code on the client
- NPI format and check digit, TIN, member ID, units, signatures
- DOS age against the 60 / 90 day timely-filing warnings
Sources
This is general information, not tax, legal or benefits advice. Your employer's plan document (SPD) and your FSA administrator's rules govern — they may set shorter deadlines, a lower carryover or no carryover. Eligible expenses are determined by your administrator. IRS figures as of Oct 23, 2026; 2027 health FSA limits have not been published yet. Nothing you enter leaves your browser.