- The formula the CRA uses
- Annual TFSA dollar limits since 2009
- Why withdrawals don't give room back straight away
- The CRA's own example of how it goes wrong
- What happens if you go over
- Will the CRA warn you?
- Non-residents: stop contributing
- What you can hold in a TFSA
- How to check your room, step by step
- The verdict
- Frequently asked questions
Your TFSA contribution room is this year's TFSA dollar limit, plus any unused room from previous years, plus any withdrawals you made last year, minus what you've already contributed this year. As of October 2026, the CRA says the 2026 dollar limit is $7,000, added to your room on January 1, and room only starts building once you're 18 and resident in Canada.
The CRA's warning is the most useful part: don't rely on the figure in your CRA account alone. It's only updated once a year in the spring, so it can be months out of date. Everything here comes from the CRA's TFSA pages.
The formula the CRA uses
| Amount | |
|---|---|
| TFSA dollar limit for the current year | + |
| Unused contribution room from previous years | + |
| Withdrawals made in the previous year | + |
| Contributions already made this year | minus |
| Your available contribution room | = |
If you've got more than one TFSA, the room is shared across all of them. It's one pot of room, not one per account.
Annual TFSA dollar limits since 2009
| Year | Dollar limit |
|---|---|
| 2009 to 2012 | $5,000 each year |
| 2013 and 2014 | $5,500 each year |
| 2015 | $10,000 |
| 2016 to 2018 | $5,500 each year |
| 2019 to 2022 | $6,000 each year |
| 2023 | $6,500 |
| 2024 to 2026 | $7,000 each year |
These are the CRA's published limits as of October 2026. Your room only includes the years from when you turned 18 and were resident in Canada. A new resident aged 18 or over starts building room on the day they become resident.
The CRA's own example of room building up: Joe turns 18 in 2024 and puts in the full $7,000, leaving $0 room for the rest of that year. If by the start of 2026 he has $5,000 of unused room carried forward, his room for 2026 is that $5,000 plus the $7,000 limit, so $12,000 in total.
Why withdrawals don't give room back straight away
When you contribute, your room drops immediately. When you withdraw, you get that amount back as new room, but only on January 1 of the following year, at the same time the new annual limit is added. That's the rule that catches people out: taking cash out and putting it straight back in the same year uses up room twice.
Gains and losses inside the account don't change your room either. A TFSA that grows doesn't use extra room, and one that falls in value doesn't give any back.
The CRA's own example of how it goes wrong
Moira turns 18 in August 2023 and in July 2024 puts in $13,500, the full 2023 and 2024 limits. On January 1 her CRA account shows $20,500 of room, because her bank hasn't yet reported her 2024 contribution. In February 2025 she trusts that figure and contributes $11,000, leaving her with a $4,000 excess that's taxed.
The lesson from the CRA: financial institutions only send a year's transactions at the end of February the following year, and the CRA processes them by spring (records from 2025 by April 2026). Use your own records and every statement from every TFSA issuer, not just your CRA account.
If you think the CRA's TFSA record is wrong, for example a contribution date or amount, the CRA says to contact your TFSA issuer. If the issuer's report was wrong, it has to send the CRA an amended report before your account can be fixed.
What happens if you go over
- Any excess in your TFSA is taxed at 1% per month for as long as it stays in the account.
- Withdraw it as soon as you spot it. Don't wait for the CRA to tell you.
- Your bank reports the withdrawal, so you don't need to call the CRA, but you still have to file a TFSA return to report the excess.
- If the over-contribution was deliberate, there may be further tax consequences.
Will the CRA warn you?
Sometimes. The CRA may notify some TFSA holders of an over-contribution through their CRA account or by post in late spring, once the issuer has reported the excess. Whether you get a letter or not, the 1% a month runs from when the excess arose, so a missing letter is no reason to wait.
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Non-residents: stop contributing
If you become a non-resident of Canada for tax purposes, you can't contribute tax-free. A non-resident contribution, other than a qualifying transfer or exempt contribution, is taxed at 1% for each month it stays in the account, and other taxes may apply. You can keep the account; it's new contributions going in that are the problem.
What you can hold in a TFSA
Permitted investments are generally the same as for an RRSP: cash, mutual funds, securities listed on a designated stock exchange, GICs, bonds and certain shares of small business corporations. Prohibited or non-qualified investments are taxable. If you also invest outside a TFSA, our T5 slip guide covers how that income gets reported.
How to check your room, step by step
- Start with your unused room at the end of last year from your own records.
- Add the $7,000 limit for 2026.
- Add any withdrawals you made in 2025.
- Subtract every contribution you've made in 2026, across all your TFSAs.
- Compare the result with your CRA account, and if they disagree, ask your TFSA issuer to check what it reported.
If you're employed, your T4 slip doesn't affect TFSA room at all: unlike an RRSP, TFSA room doesn't depend on income.
The verdict
Treat the CRA account figure as a starting point, not the answer, especially early in the year. Keep a simple running total of contributions and withdrawals, wait until January before you re-contribute anything you took out, and pull any excess out the day you find it, because 1% a month adds up quickly.
Frequently asked questions
What is the TFSA limit for 2026?
As of October 2026, the CRA says the 2026 TFSA dollar limit is $7,000, added to your contribution room on January 1, 2026.
When do TFSA withdrawals get added back to my room?
On January 1 of the following year, not straight away.
Is the TFSA room in my CRA account accurate?
It's updated only once a year in the spring, so check it against your own records and your issuers' statements.
What's the penalty for over-contributing to a TFSA?
Any excess is taxed at 1% per month for as long as it stays in your TFSA.
