How much can you contribute to a TFSA per year?
Each year you could contribute an amount up to your contribution room for the year. The TFSA contribution room will be determined by the CRA for each eligible individual who files an annual income tax return. Your contribution room would be made up of three amounts:
First: Each year since 2009 you would be allocated and allowed to contribute at least $5,000. Prior to and after 2015, this annual amount is indexed to inflation and rounded to the nearest $500 on a yearly basis.
Year
Annual Contribution Amount
2009 - 2012 $5,000/Year 2013 - 2014 $5,500/Year 2015 $10,000 2016-2018 $5,500/Year 2019-2022 $6,000/Year 2023 $6,500 2024-2025 $7,000/Year Total Contribution Room (born 1991 or earlier ) $102,000 Second: Any withdrawals made during the year would be added to the contribution room for the next year.
Third: Any unused contribution room from the previous year would be added to the contribution room for the year.
TFSA Unused Contribution Room
When a TFSA Holder contributes less than the maximum contribution limit, the difference is referred to as unused contribution room.
- Unused contribution room will accumulate each year.
- Unused contribution room is carried forward indefinitely, allowing the Holder to catch up in the future.
- A TFSA withdrawal will increase the contribution room for the year after withdrawal. As a result, when amounts are withdrawn from a TFSA they can be re-contributed in the future when funds become available.
- Canada Revenue Agency will confirm the contribution room on the annual Notice of Assesment.
For example: If you had $47,000 saved in a TFSA in 2020 and needed to withdraw $7,000 in that same year, you will not be able to replace that $7,000 until 2021.
In 2021, you will have:
- The Standard annual increase in contribution room for the new year ($6,000 for 2021)
+- Any withdrawals from the previous year ($7,000 in this example)
+- Any unused contribution room from 2020 ($16,500 in this example)
=Total of $29,500 allowed to be added to a TFSA in 2021. This will bring your total contribution back up to the maximum contribution limit of $69,500 for 2021.
.jpg)
