Introduced in 2009, the Tax-Free Savings Account (TFSA) is available to Canadian residents age 18 or older. In addition to cash, a TFSA can hold several other investments such as bonds, stocks, and mutual funds. Any interest income, dividends or capital gains earned in the account are not taxed and withdrawals can be made tax-free. There is an annual TFSA contribution limit, raised to $7,000 for 2024, and any unused contributions from one can year can be carried forward to the next year. Your contribution room, the maximum amount you can deposit to your TFSA, consists of the current year's contribution limit, any unused contribution room that you have accumulated from previous years and the total value of withdrawals made in the previous year. Any contribution made to a TFSA beyond the maximum amount is considered an over-contribution, and the Canada Revenue Agency (CRA) will charge a penalty of 1 per cent per month on the excess contribution until it is withdrawn.
Use the TFSA Limit calculator to determine your 2024 TFSA contribution room limit.
