What is the TFSA Limit for 2024?

The annual TFSA limit for 2024 is $7,000, which is an increase from $6,500 in 2023.

That means you can contribute $7,000 to your TFSA this year. Since you can carry forward any unused contribution room, you may be able to contribute even more.

It also means that starting on January 1, 2024, eligible Canadians will now have a cumulative lifetime TFSA contribution limit of $95,000 (see “What is the lifetime contribution limit for TFSA?” below for examples and charts).

What is my TFSA contribution room?

While you’re limited with how much you can contribute each year, the good news is that your TFSA contribution room grows every year (minus any withdrawals).

Your contribution room is made of:

Your yearly TFSA dollar limit
Plus any unused contribution room since 2009
Plus any withdrawals made in the previous year*

*Any withdrawals from your TFSA will be added back to your contribution room at the beginning of the next year.

So, if you withdrew money from your TFSA in 2023, you could reclaim that contribution room in 2024.

You can open as many TFSAs as you want, but the amount of money you can contribute is limited, no matter how many accounts you have.

What is the lifetime contribution limit for the TFSA?

If you’ve never opened a TFSA before, you can deposit a hefty chunk of change to the account – $95,000 total (as long as you were 18 or older in 2009).

Listed below are the cumulative and annual limits since the program began, as well as how withdrawals from TFSAs are accounted for:

If you were 18 years old in 2009 and have not contributed to a TFSA at all, using the table below, your maximum contribution in 2024 would be $95,000
If you turned 18 any time after 2009, your lifetime TFSA contribution limit begins the year you turned 18

EXAMPLE:

If you already have $25,000 in a TFSA, your maximum contribution in 2024 would be $70,000
If you withdrew $6,000 from your TFSA in 2023, your contribution limit for 2024 would be $76,000. Here’s how:

Where can I find my TFSA contribution room?

You can confirm your TFSA contribution room through logging into CRA MyAccount for Individuals or by calling the Tax Information Phone Service (TIPS) at 1-800-267-6999. If you have an authorized representative, they can also get these details for you.

The CRA can provide you with a TFSA Room Statement to confirm your contribution limit and a TFSA Transaction Summary to confirm the contributions and withdrawals the CRA has received from your TFSA issuer(s).

Tip: It’s a great idea to track your own transaction records of withdrawals and contributions. The CRA determines your available TFSA contribution room based on information provided annually by TFSA issuers, so it’s in your own best interest to ensure that your records align with that of the CRA.

How does a TFSA compare to a RRSP?

Unlike a Registered Retirement Saving Plan (RRSP), TFSA contributions do not provide an immediate tax-deduction. However, unlike an RRSP, when you withdraw funds from a TFSA, they are not taxed.

Additionally, any interest, dividends, or capital gains earned on investments in a TFSA are not taxable while held in the account or when they’re withdrawn. This means you never have to report your TFSA earnings or withdrawals as income on your taxes.

This also means your TFSA earnings will never affect your eligibility for income tested benefits (like Old Age Security or Employment Insurance) or federal credits (like the Canada Child Benefit or services tax/harmonized sales tax (GST/HST) credit).

To learn more about the differences between TFSAs and RRSPs, please see our blog, “Should I use an RRSP or TFSA as a business owner?“

How do I qualify for a TFSA?

Any resident of Canada who is 18 years old with a valid Social Insurance Number (SIN) accumulates TFSA contribution room each year (since 2009), even if they do not file a tax return or open a TFSA.

Yearly contribution limits are set by the federal government. However, even if you do not max out your TFSA in one year, the unused contribution room will carry forward into the following year as part of your lifetime contribution limit.

Notable exceptions

As stated above, TFSAs are available to any Canadian resident 18 years of age or older with a valid SIN.

The only exception to this rule is if you live in a province or territory where you cannot enter an agreement or contract – which would be necessary to open a TFSA – until the age of 19. In this case, your contribution limit for the year you are 18 rolls over to the following year.

Non-residents who are over 18 years old with a valid SIN are also eligible to open an account. However, if you contribute while you are a non-resident, you will be taxed 1% for every month you keep your contribution in the account. For more information about non-residents, please see the CRA website.

How do I open a TFSA?

According to the Canada Revenue Agency (CRA) website, to open a TFSA account you must:

Contact your financial institution, credit union, or insurance company (issuer).
Provide the issuer with your SIN and date of birth so the issuer can register your qualifying arrangement as a TFSA. Your issuer may require supporting documents.

At the time of opening your account, your TFSA issuer can also provide you with specific details about how your contributions could be invested and what types of returns you can expect with each type of investment.

Working with an issuer is critical to ensure that your TFSA is registered correctly so that any income you earn from your account remains tax free.

If you’re confident in your own investment skills, the CRA has a provision for you to establish a self-directed TFSA. However, you would still need to speak to an issuer to set this up.

What is the penalty for going over my TFSA limit?

If you go over your TFSA contribution limit, this excess amount will be subject to a 1% per month penalty tax for as long as that excess amount remains in your account. For example, if you over contribute $3,000 in a year, you will pay $30 per month, every month you remain in excess – that’s $360 in penalties in one year alone.

This is why it’s so important to review your TFSA contributions, annual withdrawals, and limits before you add additional funds in the year.

Note: Withdrawals cannot be added back in the same year that they were made. You will have to wait until the following year to add it back (see example above)

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What is the TFSA Limit for 2024?

What is a TFSA?