What happens to unused money in FSA?
Asked by: Gregory Rolfson | Last update: January 17, 2026Score: 5/5 (33 votes)
Where does my FSA money go if I don't spend it?
For employees, the main downside to an FSA is the use-it-or-lose-it rule. If the employee fails to incur enough qualified expenses to drain his or her FSA each year, any leftover balance generally reverts back to the employer.
What happens to the money in my Flexible Spending Account?
If you quit before you use your FSA funds, your employer gets the money. You'll also lose the money if you're employed with the company but don't use all of the funds within the plan year.
How do I spend my leftover FSA money?
- Healthcare visits. ...
- Prescription medications. ...
- Vision care. ...
- Dental care. ...
- Hearing aids. ...
- Over-the-counter medications. ...
- First aid supplies. ...
- Skin care products.
What happens to uncashed FSA checks?
Typically, each state establishes the useful life of a check or bank draft used to disburse FSA program funds. After this established date, the check cannot be negotiated and the proceeds of an uncashed check normally escheat to an unintended third-party (the state or the institution).
What happens to your unused FSA funds?
Do you get unused FSA money back?
The IRS created the ""use or lose"" rule, which states that all money left in your FSA is forfeited after the benefit period ends . If you don't use all of your FSA funds during the benefit period, you risk losing money.
What happens to checks that are not cashed?
The United States Department of Treasury automatically voids all uncashed checks after one year from the date of issue and returns the funds to the issuing agency. Stale-dated and uncashed checks can only be re-issued within 6 years from the original date of issue, per the Barring Act 31 U.S.C. 3702(b).
Can I cash out FSA funds?
You can't withdraw money from an ATM
One of those is that the money can only be spent on FSA-eligible expenses.
How to make the most of your FSA money before it disappears?
1) Doctors And Specialist Visits
Co-pays for a family can add up as an out-of-pocket expense, but you shouldn't forgo regular preventive care or annual checkups because of it. So, use your FSA/HSA funds first off for medical expenses like doctors, dentists, and optometrist appointments.
Can you keep FSA money?
You generally must use the money in an FSA within the plan year. But your employer may offer one of 2 options: It can provide a "grace period" of up to 2 ½ extra months to use the money in your FSA. It can allow you to carry over up to $660 per year to use in the following year.
Can I use FSA for gym membership?
But that's not all a Letter of Medical Necessity can do for you. You can even pay for your gym membership with FSA/HSA funds, making it easier than ever to access top-of-the-line equipment like the models we have in our studios.
What happens to FSA money if you are laid off?
If you quit or lose your job, any unspent funds in your FSA go back to your employer. However, FSA dollars can be spent on dental, vision, prescription medications, and other eligible expenses before you leave your job. You might have the option to continue using your FSA through COBRA coverage if you're eligible.
Can I transfer money from my FSA to my bank account?
Can You Transfer FSA to a Bank Account? The answer to this question is a straightforward "no." FSA money can only be used for designated healthcare-related purposes. As per the IRS, you cannot transfer that money to another account.
Can I pay for massage with FSA?
Massage Therapy may be eligible for reimbursement with a Letter of Medical Necessity (LMN) with flexible spending accounts (FSA), health savings accounts (HSA) and health reimbursement arrangements (HRA).
What happens to your FSA money when you quit?
Any unused money in your FSA goes back to your employer once you leave your job. If you have a healthcare FSA, you could have the option to continue access to your funds through COBRA. But you can't use your FSA contributions to pay for health insurance premiums either through COBRA or in the private market.
Is toilet paper FSA eligible?
Here are examples of items and expenses that are not FSA-eligible for 2024: General health items: toiletries like toothpaste, toilet paper, or shampoo, cosmetic products, vitamins and supplements (without a prescription) Non-medical equipment: car seats, strollers, non-medical exercise equipment.
Can I use my FSA to buy a treadmill?
If you have a letter from a medical professional stating that exercise equipment is a medical necessity, your FSA can cover it.
Can you use FSA for vitamins?
Are vitamins FSA/HSA eligible? You want to be careful when trying to buy vitamins with your FSA or HSA. They are not always deemed a qualified expense. If your vitamins are not prescribed by a healthcare professional or used to treat a specific condition, your purchase most likely won't be FSA or HSA eligible.
How do I get my unused FSA money back?
Unused FSA money returns to your employer. The funds can be used towards offsetting administrative costs incurred during the plan year, employers can also reduce salary reductions in the next FSA year, or funds must be equally distributed to employees who enroll in an FSA for the next year.
Can I buy sunglasses with FSA?
You can use your FSA funds to purchase prescription and reading sunglasses online, through your eye doctor, or at an optical or retail store. Most people are given an FSA debit card, which can often be used to pay during the checkout process just like a regular debit or credit card.
Are toothbrushes FSA eligible?
Brush-Up on FSAs and HSAs
However, current law does not recognize certain oral healthcare products — such as manual toothbrushes, electric toothbrushes, water flossers, mouthwash, or OTC anti-cavity toothpaste — as “qualified medical expenses.”
What do companies do with uncashed checks?
In general, employers are required to hand over the amount of an unclaimed paycheck to their state. This process, called "escheatment," requires abandoned or unclaimed personal property to be submitted to the state after a certain period.
Can I cash a 2 year old check?
Yes, you can cash a 2-year-old check in theory, but the bank won't be legally obligated to process it for you.
Do unused checks go bad?
After 180 days — or six months — personal checks are considered "stale." Financial institutions do not legally have to honor them, though some banks may have a more flexible policy. Other types of checks are valid for a year, and some don't expire at all.