Tax Free Savings Accounts


Starting in 2009 an additional savings plan, the Tax Free Savings Account (TFSA) became available to Canadians age 18 and older to provide a savings vehicle to meet any on-going savings need.

TFSA contributions are made from after-tax income, with both the contributions and the investment earnings exempt from tax upon withdrawal.  Withdrawals will not affect eligibility for federal income-tested benefits or tax credits.

Annual Contribution Limits for TFSAs

  • 2009   - $5,000
  • 2010   - $5,000
  • 2011   - $5,000
  • 2012   - $5,000
  • 2013   - $5,500
  • 2014   - $5,500
  1. Annual new contribution is currently $5,500 per year.  Increase, rounded to the nearest $500, will be applied as warranted by the consumer price index.
  2. Penalty for over-contributions is one per cent per month on the highest excess contribution at any time during the month.
  3. Withdrawals in a year will be added to contribution room in the following calendar year.
  4. Any income attributable to deliberate over-contributions will be taxed at 100 per cent.  As well, the withdrawal of amounts in respect of deliberate over-contributions, prohibited investments, non-qualified investments, asset transfer transactions and income related to those amounts do not create additional TFSA contribution room.


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