Canada Revenue Agency Tax Tips reminded Canadians to check their TFSA contribution room and stay within the annual dollar limit.
The CRA tax tip explains how annual limits, unused room, and withdrawals affect TFSA contribution room.
The CRA tax tip says TFSA contribution room is based on the annual dollar limit, unused room from previous years, and withdrawals made in previous years, excluding direct transfers.
The annual TFSA dollar limit for 2024 was $7,000. The CRA tax tip says the 2025 limit is also $7,000.
The CRA also warned that excess TFSA contributions can be subject to tax while the excess amount remains in the account.
For households, the after-tax effect depends on eligibility, filing obligations, payment timing, and the final design of the rule.