Annual contribution limits for TFSAs

The amount you can put into a Tax-Free Savings Account (TFSA) each year is set by the Canada Revenue Agency and changes based on inflation. For 2024, the annual limit is $7,000. This limit applies to you as an individual — it is not shared with a spouse or partner, and each person with a TFSA has their own separate room.

The limit has not always been $7,000. It was $5,000 when the TFSA first launched in 2009, then rose to $5,500 in 2013, and reached $6,000 in 2015. In 2023 it moved to $6,500, and in 2024 it became $7,000. The CRA rounds the limit to the nearest $500, so it only changes every few years when inflation pushes it across that threshold.

If you contribute more than your annual limit in a single year, you will owe a penalty tax of 1% per month on the excess amount until you withdraw it. This penalty applies even if you did not intend to over-contribute, so it is worth tracking your own deposits against the CRA's records.

Key Takeaways

  • The 2024 TFSA contribution limit is $7,000 per person per year, and this limit changes every few years based on inflation.
  • Unused contribution room carries forward to future years, so you can catch up if you did not max out your account in previous years.
  • You can find your total available contribution room on your CRA My Account login or by calling the CRA directly.
  • Over-contributing triggers a 1% monthly penalty tax on the excess, so verify your room before making large deposits.
  • Withdrawals from your TFSA restore your contribution room, but only starting January 1 of the following year.

How contribution room accumulates and carries forward

Contribution room is cumulative. If you did not open a TFSA until 2015, you do not lose the room from 2009 to 2014 — you can still use it. The CRA tracks every year of room you have ever had since you turned 18, whether you used it or not. This means you can catch up on years you missed, as long as you stay within your total accumulated room.

For example, if you are 35 years old and have never opened a TFSA, you have room going back to age 18 — that is 17 years of accumulated room. You could deposit a large lump sum in your first year, up to your total accumulated limit, without penalty. The CRA will have calculated this total for you.

When you withdraw money from your TFSA, that contribution room does not come back until January 1 of the next calendar year. If you withdraw $3,000 in June, you cannot re-deposit that $3,000 until the following January. This is different from a Registered Retirement Savings Plan (RRSP), where withdrawals do not restore room at all.

Finding your personal contribution room

The CRA maintains a record of your contribution room, and you can see it yourself in two ways. The fastest is to log into CRA My Account online using your Social Insurance Number and password. Once logged in, navigate to the TFSA section, and your available room for the current year will display there, along with a history of your deposits and withdrawals.

If you do not have online access set up, you can call the CRA directly at 1-800-959-8281. Have your Social Insurance Number ready. The CRA will tell you your current room and can also mail you a Notice of Assessment that shows your TFSA history. This call takes about 10 minutes.

Your financial institution — the bank or investment firm where you hold your TFSA — does not track your total room across all accounts. They only see deposits and withdrawals at their own institution. If you have multiple TFSAs at different banks, you must add up the deposits yourself and check against the CRA's total to make sure you have not over-contributed.

What happens if you over-contribute

Over-contributing means depositing more than your available room in a single year. The CRA charges a penalty tax of 1% per month on the excess amount. If you over-contribute by $1,000 and do not catch it for six months, you owe $60 in penalty tax ($1,000 × 1% × 6 months). The penalty continues to accrue every month until you withdraw the excess.

The CRA does not automatically catch over-contributions immediately. They review TFSA activity when they process your tax return or during a routine audit. You might not hear about an over-contribution for months or even years after it happens. When they do find it, they will send you a notice showing the excess amount and the penalty owed.

If you realize you have over-contributed, withdraw the excess as soon as possible. The sooner you remove it, the less penalty tax accumulates. Write to the CRA explaining the error — they sometimes waive penalties if you over-contributed by a small amount and corrected it quickly, though they are not required to.

Contribution room when you have multiple TFSAs

You can open more than one TFSA at different financial institutions. You might have one at a bank, one at an investment firm, and one at a credit union. However, your total contribution room across all accounts is still the same annual limit. If your limit is $7,000 for 2024, that $7,000 is split among all your TFSAs combined, not $7,000 per account.

This is where tracking becomes important. If you deposit $4,000 into one TFSA and $3,500 into another, you have used $7,500 of your $7,000 room and over-contributed by $500. The CRA sees all your accounts when they review your tax return, so they will catch this even if the two banks do not know about each other.

Some people keep multiple TFSAs for organizational reasons — one for emergency savings, one for investments, one for a specific goal. That is fine, but you must track the total across all of them. A spreadsheet with the account name, institution, and deposit date is the simplest way to stay on top of it.

How spousal TFSAs affect your room

A spousal TFSA is a TFSA held in your spouse's name, but funded with your money. It does not give you extra contribution room. Your room stays the same whether you fund your own TFSA, your spouse's TFSA, or both. If you and your spouse each have $7,000 of room in 2024, your combined household room is $14,000 — but that is because you are two separate people, not because of any spousal rule.

The main reason to use a spousal TFSA is income splitting in retirement. If one spouse has much higher income than the other, putting money into the lower-income spouse's TFSA means the investment growth and withdrawals happen in their name, potentially reducing household tax. You must be careful about attribution rules — if you contribute to a spousal TFSA and then withdraw from your own TFSA within a certain period, the CRA may attribute the withdrawal back to you for tax purposes.

A spousal TFSA is opened at a financial institution just like a regular TFSA. You tell the institution it is a spousal account when you open it, and you provide your spouse's Social Insurance Number. Your spouse controls the account and can withdraw money anytime, but the contribution room comes from your accumulated room, not theirs.

Changes to TFSA limits over time

The TFSA limit has changed five times since the account was created. In 2009 it started at $5,000. It stayed there until 2013, when it rose to $5,500. In 2015 it jumped to $6,000. It remained at $6,000 for eight years until 2023, when it increased to $6,500. In 2024 it reached $7,000. The next increase will happen when inflation pushes the limit across the next $500 threshold, which the CRA projects could be in 2027 or 2028, though that is not certain.

These changes affect your accumulated room going forward, but they do not change room you already had. If you had $5,000 of room in 2012 and did not use it, that $5,000 stays in your account. When the limit rose to $5,500 in 2013, you gained an additional $5,500 of new room for that year — your total room did not retroactively become $5,500 for 2012.

Frequently Asked Questions

Can I contribute more than the annual limit if I have unused room from previous years?

Yes. If you have accumulated room from years you did not use your TFSA, you can deposit more than the current year's limit in a single year. For example, if you have $35,000 of total accumulated room and only $7,000 of that is from 2024, you can still deposit all $35,000 in 2024 without penalty. The CRA tracks your total room, not just the current year's limit.

What if I withdraw money from my TFSA and want to put it back in the same year?

You cannot re-deposit a withdrawal in the same calendar year. If you withdraw $5,000 in August, that $5,000 of room does not come back until January 1 of the next year. You can deposit other money into your TFSA in the same year if you have unused room, but not the amount you just withdrew.

Do I have to report my TFSA contributions to the CRA?

No. Your financial institution reports your TFSA activity to the CRA automatically. You do not need to include TFSA information on your tax return. The CRA tracks your contributions and withdrawals on their end and will contact you if they find an over-contribution.

What happens to my TFSA contribution room if I move to another country?

Your contribution room stays the same as long as you are a Canadian resident for tax purposes. If you move abroad and become a non-resident, you can no longer contribute to your TFSA, but you can still hold the account and withdraw from it. Any money already in the account continues to grow tax-free. You regain contribution room if you move back to Canada and re-establish residency.

Can I use my spouse's unused TFSA room if they do not want to open an account?

No. Contribution room is personal to each individual and does not transfer between people. If your spouse does not open a TFSA, their room is not available to you. However, you can open a spousal TFSA in their name and fund it with your money, which uses your contribution room but puts the account in their name.