TFSA Guidelines
Some basic guidelines relating to tax-free savings account include the following:
- Contributions can be made by Canadian residents aged 18 or over at the time of the contribution, up to the amount of their unused contribution room.
- The Federal 2015 Budget increased the limit to $10,000 for 2015 and later years, with no further indexation. However, Bill C-2, December 2015 leaves the previous indexation of the TFSA limit in place, indexing $5,000 to inflation for each year after 2009 and rounding the result to the nearest $500. Up to $5,000 per year (indexed, see table below) 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 $10,000 2015 limit was not going to be indexed.
- There is no lifetime limit to the amount of contributions.
- If a person is or becomes a non-resident, they will not have any contribution room for years in which they are non-resident for the entire year. They will still have the full annual amount of contribution room for the year in which they became a non-resident, or the year in which they returned to become a resident of Canada again.
- 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. See CRA information on Contributions.
- Contributions can consist of in kind contributions of qualified investments. At the time the investments are contributed, there is a deemed disposition. Any resulting
- capital gain will be taxable
- capital loss cannot be claimed – see our article Transfer shares to a registered account, but not at a loss!
- A TFSA holder must not carry on the business of day-trading in their TFSA, or 100% of the income in the TFSA will be taxed. See Taxes Payable re TFSAs link at bottom of this article.
TFSA Dollar Limits and Cumulative Totals
| TaxTips.ca TFSA Limits | ||
|---|---|---|
| Years | TFSA Dollar Limit | Cumulative Total |
| 2026 | $7,000 | $109,000 |
| 2025 | 7,000 | 102,000 |
| 2024 | 7,000 | 95,000 |
| 2023 | 6,500 | 88,000 |
| 2022 | 6,000 | 81,500 |
| 2021 | 6,000 | 75,500 |
| 2020 | 6,000 | 69,500 |
| 2019 | 6,000 | 63,500 |
| 2018 | 5,500 | 57,500 |
| 2017 | 5,500 | 52,000 |
| 2016 | 5,500 | 46,500 |
| 2015 | 10,000 | 41,000 |
| 2014 | 5,500 | 31,000 |
| 2013 | 5,500 | 25,500 |
| 2009-2012 | 5,000 | 20,000 |
An indexation factor of 1.010 or greater will be needed for the 2026 taxation year (based on the CPI increase from October 2025 to September 2026), to increase the 2027 dollar limit to $7,500. See Indexation of the Personal Income Tax System for how the indexation factor is calculated.
Any person who was born in 1991 or earlier and has never contributed to a TFSA will have contribution room of $109,000 in 2026.
Tax Tip: Track your contribution room yourself, and do not overcontribute!
File a Tax Return to Establish TFSA Contribution Room
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 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 the above 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 CRA.
Tax on Excess Contributions
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. See also Taxes Payable re TFSA – link below.
TFSA Contribution Deadline
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 and you’ve already contributed the maximum to your TFSA, make sure the withdrawal is done by December 31st, in order to have the amount added back to the TFSA room on January 1st of the following year. See also TFSA Withdrawals – link below.
Do Not Transfer Loss Investments to Your TFSA
Tax Tip: If you have a loss on your investment, don’t transfer it to your TFSA or other registered account.
Leaving Canada – What Happens to Your TFSA
If you become a non-resident of Canada, you can continue to hold a TFSA and not pay tax on the income within it. However, you cannot contribute to the TFSA while you are a non-resident, and you will not accumulate contribution room. See Canada Revenue Agency information on Leaving Canada.
In Kind Transfers to Your TFSA
If you transfer securities to your TFSA, this is a taxable disposition of the securities. If there is a gain, it is taxed as a capital gain. If there is a loss, it is not deductible – see this topic above.
You can do an in kind transfer of securities from your RRSP or RRIF to your TFSA, but the withdrawal from the RRSP or RRIF is included in your income.
Canada Revenue Agency (CRA) Resources
RC4466 – Tax-Free Savings Account (TFSA), Guide for Individuals – lots of detailed information, and examples.
RC343 Worksheet – TFSA Contribution Room – use this worksheet to calculate your TFSA contribution room for the current year