The Federal Fiscal Year

The federal fiscal year began on January 1 until 1842, when Congress moved it to July 1. The Congressional Budget and Impoundment Control Act of 1974 moved it again, to October 1, to give Congress more time to complete the new budget process after the President submits the budget early in the calendar year. The change took effect with fiscal 1977, and a three-month transition quarter from July 1 to September 30, 1976, bridged the gap. Each fiscal year is named for the calendar year in which it ends, so fiscal 2026 runs from October 1, 2025, to September 30, 2026.

The fiscal year structures nearly every federal budget deadline. Regular appropriations are supposed to be enacted before October 1, and most annual appropriations expire at the end of the fiscal year unless Congress provides multiyear or no-year funds. Agencies rush to obligate expiring money in September, and budget projections, deficit figures, and agency reports are measured by fiscal year. When Congress has not enacted appropriations by October 1, it must pass a continuing resolution or the affected agencies shut down.

Congress has rarely met the deadline: it last enacted all regular appropriations bills on time for fiscal 1997, and continuing resolutions are now needed nearly every year. A lapse in appropriations on October 1, 2025, began a government shutdown that lasted until mid-November, the longest on record, and fiscal 2026 funding was not complete until April 30, 2026. Fiscal 2027 began under a continuing resolution running through December 11, 2026. Some reformers have proposed biennial budgeting or automatic continuing resolutions to prevent shutdowns, while others say deadlines force Congress to make decisions it would otherwise postpone.