Contributions can be made by Canadian residents aged 18 or over at the
time of the contribution.|
|Up to $5,000 per year ($5,500 for 2013) can be contributed, with unused contribution room being carried forward.|
|The annual contribution limit is indexed to inflation in $500 increments (i.e., to the nearest $500),
in the same manner as personal tax credits and tax brackets are
indexed. The 2014 TFSA limit is $5,500.|
There is no lifetime limit to the amount of
If a person has contribution room, but no funds to
contribute, they may contribute funds given to them by their spouse or
common-law partner, with no attribution of income to the spouse.|
Contributions can consist of in kind
contributions of qualified investments. At the time the
investments are contributed, there is a deemed
disposition. Any resulting
The easiest way to establish a record of your TFSA
contribution room is to file a tax return annually, even if you have
no taxable income. Your TFSA contribution room can then be seen
through Canada Revenue Agency's My
Account or Quick
Access e-services, or you can phone CRA to get the balance. However,
the amount reported will only be correct as of January 1st of each
year, after financial institutions have reported all TFSA transactions
for the prior year, which may not be until the end of March.
Thus, it's important to track this yourself. The history of
annual limits for each year is shown in this table: The first
year that contributions could be made was 2009.
CRA says that Individuals who have not filed returns for prior
years (because, for example, there was no tax payable) would be
permitted to establish their entitlement to contribution room by
filing a return for those years or by other means acceptable to the
The tax payable for excess contributions to a tax-free
savings account is 1% per month, for any month in which there is an excess
amount at any time in the month. This means there
will be a tax payable even if the excess amount is withdrawn in the
same month in which it is contributed.
There is no deadline for contributions to a TFSA, as
the unused contribution room is carried forward into the next year.
However, a withdrawal in any year does not increase the TFSA room until
the following calendar year. Thus, if you are thinking of making a
withdrawal close to year end, make sure it is done by December 31st, in
order to have the withdrawal amount added back to the TFSA room sooner.
Tip: If you have a loss on your investment, don't transfer it to your TFSA.