Effective 2013 plan years, employers may amend their plan documents to allow participants to carry over up to $500 of unused amounts to the following plan year. (The limit was increased to $550 as of January 1, 2020.) Doing so allows participants to spend the carryover amounts on qualifying medical expenses incurred during the following plan year. A carryover of unused amounts does not affect the indexed $2,500 annual limit. A plan year may allow either a rollover or a grace period for unused amounts for the same plan year but not both. Carryovers only apply for qualifying medical expenses; plans may not allow participants to carry over unused amounts for dependent care or other expenses. The carryover amount does not reduce the participant's maximum FSA contribution for the next plan year. Accordingly, a person who carries over $550 to the next plan year and who also contributes $2,500 to their FSA for that plan year may be able to receive reimbursements from his or her FSA for up to $3,050 of eligible medical expense during that plan year. In order for an individual to be able to carry over unused amounts, the plan must be amended to permit this type of a carryover.