Tax-Free Savings Account (TFSA),

Guide for Individuals

RC4466(E) Rev. 13/11

 Is this guide for you?

T his guide is for individuals who have opened or who

are considering opening a tax-free savings account
(TFSA). It provides general information on this investment
with other important investment decisions, you should
speak with your financial advisor or a representative at
your financial institution to be sure you are aware of any
opportunity such as who is eligible to open a TFSA, what conditions, limitations, or administrative fees that may
the contribution limits are, possible tax situations, apply.
non-resident implications, transfers on marriage or
relationship breakdown, what happens when a TFSA Definitions
holder dies, and various other topics. For more information
We have included definitions of some of the terms used in
on the TFSA, go to www.cra.gc.ca/tfsa.
this guide in the ‘‘Definitions’’ section starting on page 4.
This guide does not deal with every tax situation. It is You may want to read this before you start.
not intended to cover all possible situations or to replace
professional financial, tax, or estate planning services. As

If you are blind or partially sighted, you can get our publications
in braille, large print, etext, or MP3 by going
to www.cra.gc.ca/alternate. You can also get our publications
and your personalized correspondence in these formats by
calling 1-800-959-8281.

La version française de ce guide est intitulée Guide du compte d’épargne libre d’impôt (CELI) pour les particuliers.
Unless otherwise noted, all legislative references are to the Income Tax Act and the Income Tax Regulations.

www.cra.gc.ca
 Table of Contents
Page Page
Definitions ........................................................................... 4 Tax payable on TFSAs ....................................................... 15
Tax payable on excess TFSA amount ............................... 15
What is a TFSA? .................................................................. 6
Tax payable on non-resident contributions ..................... 18
Types of TFSAs .................................................................... 6
Tax payable on non-qualified investments. .................... 19
Who can open a TFSA? ...................................................... 6 Reporting requirements and tax payable by
the TFSA holder (non-qualified investment) ........... 19
How to open a TFSA .......................................................... 7 Claiming a refund ........................................................... 19
Self-directed TFSA............................................................... 7 Reporting requirements by a trust governed by
Contributions ...................................................................... 7 a TFSA ........................................................................... 19
TFSA contribution room ..................................................... 7 Tax payable on prohibited investments ........................... 19
Where can I find my TFSA contribution room Reporting requirements and tax payable by
information? ..................................................................... 7 the TFSA holder (prohibited investment) ................ 20
Representatives .................................................................... 8 Refund of taxes paid ....................................................... 20
How your TFSA contribution room is determined......... 8 Claiming a refund ........................................................... 20
How is your TFSA information obtained? ....................... 8 Tax payable on an advantage ............................................ 20
TFSA return and payment of taxes ................................... 20
Types of permitted investments ...................................... 8 Proposed TFSA return explained .................................. 20
Foreign funds ....................................................................... 9 What should you do if you disagree with your
“In kind” contributions....................................................... 9 assessment? ...................................................................... 21
Transfers from your RRSP.................................................. 9
Online services ................................................................... 21
Withdrawals from a TFSA ................................................ 9 My Account ......................................................................... 21
Making withdrawals ........................................................... 9 My Payment......................................................................... 21
Replacing withdrawals ....................................................... 10 Electronic payments ........................................................... 21
Non-residents of Canada ................................................... 10 For more information ........................................................ 22
Impact on your government benefits and credits ......... 10 What if you need help? ...................................................... 22
Forms and publications ...................................................... 22
Qualifying transfers ........................................................... 11 Electronic mailing lists ....................................................... 22
Transfers between your own TFSAs ................................. 11 Tax Information Phone Service (TIPS) ............................. 22
Transfers upon breakdown of marriage or Teletypewriter (TTY) users ................................................ 22
common-law partnership ............................................... 11 Related forms and publications ........................................ 22
Death of a TFSA holder ..................................................... 12 Forms ................................................................................ 22
Types of beneficiaries.......................................................... 12 Interpretation bulletins and tax folios .............................. 22
Successor holder............................................................... 12 Pamphlets ......................................................................... 22
Designated beneficiaries ................................................. 14 Our service complaint process .......................................... 22
Designation of an exempt contribution by Tax information videos ...................................................... 22
a survivor ...................................................................... 14 Your opinion counts ........................................................... 22
Donation to a qualified donee ........................................ 15
Management fees ................................................................. 15

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 Definitions
Advantage – any benefit, loan, or debt that depends on the are considered to be acting together. Each case depends
existence of a TFSA other than: TFSA distributions, upon its own facts.
administrative or investment services in connection with a
An individual is not at arm’s length with his or her TFSA.
TFSA, loans on arm’s length terms, and payments or
allocations to a TFSA by the issuer, including bonus interest For more information, see Interpretation Bulletin IT-419,
and other reasonable payments to a TFSA by the issuer. Meaning of Arm’s Length.
An advantage also includes any benefit that is an increase Common-law partner --- a person who is not your spouse
in the fair market value of a TFSA that can reasonably be (see the definition of spouse on the next page), with whom
considered attributable, directly or indirectly, to one of the you are living in a conjugal relationship, and to whom at
following: least one of the following situations applies. He or she:
■ a transaction or event (or a series of transactions or a) has been living with you in a conjugal relationship and
events) that would not have occurred in an open this current relationship has lasted at least 12 continuous
market between arm’s length parties acting prudently, months;
knowledgeably, and willingly, one of the main purposes
Note
of which is to enable the holder (or another person or
In this definition, 12 continuous months includes any
partnership) to benefit from the tax-exempt status of
period you were separated for less than 90 days because
the TFSA;
of a breakdown in the relationship.
■ a payment received in substitution for either:
b) is the parent of your child by birth or adoption; or
– a payment for services rendered by the holder or
a person at non-arm’s length with the holder; or
c) has custody and control of your child (or had custody
– a payment of a return on investment or proceeds of and control immediately before the child turned 19 years
disposition for property held outside of the TFSA by of age) and your child is wholly dependent on that
the holder or a person dealing at non-arm’s length with person for support.
the holder;
Deliberate over-contribution – a contribution that an
■ a swap transaction (see “Swap transaction” on page 6); individual makes to a TFSA that results in, or increases,
or an excess TFSA amount, unless it is reasonable to
conclude that the individual neither knew nor ought to
■ specified non-qualified investment income
have known that the contribution could result in liability
(see definition on the next page) that has not been
for a tax or similar consequences. Income that is
distributed from the TFSA within 90 days of the holder
reasonably attributable, directly or indirectly, to a
of the TFSA receiving a notice from us requiring them
deliberate over-contribution is an advantage subject to
to remove the amount from the TFSA.
the special tax on advantages.
An advantage also includes any benefit that is income
Excess TFSA amount – the total of all contributions made
(including a capital gain) that is reasonably attributable,
by the holder to all their TFSAs at or before a particular
directly or indirectly, to one of the following:
time in the calendar year, excluding a qualifying transfer
■ deliberate over-contribution to a TFSA; or or an exempt contribution,
■ a prohibited investment (see definition on the next page) Minus:
for any TFSA of the holder.
■ the holder’s unused TFSA contribution room at the end
Note of the preceding calendar year;
If the advantage is extended by the issuer of a TFSA, or
■ the total of all withdrawals from the holder’s TFSA in the
by a person with whom the issuer is not dealing at arm’s
preceding calendar year, other than a qualifying transfer
length, the issuer, and not the holder of the TFSA, is
or a specified distribution;
liable to pay the tax resulting from the advantage.
■ for a resident of Canada at any time in the year, the TFSA
Arm’s length – relationship or transaction between persons
dollar limit for the calendar year; for any other case, nil;
who act in their separate interests.
and
Related persons are not considered to be dealing with each
■ the total of all withdrawals made in the calendar year
other at arm’s length. Related persons include individuals
from all of the holder’s TFSAs, other than a qualifying
connected by a blood relationship, marriage, common-law
transfer or a specified distribution, or the portion of the
partnership, or adoption (legal or in fact). A corporation
withdrawal that is more than the excess TFSA amount
and an individual, or two corporations, may also be related
determined at that time.
persons.
Unrelated persons might not be dealing with each other at
arm’s length at a particular time. For example, one person
is under the influence or control of the other, or the persons

4 www.cra.gc.ca
Exempt contribution – a contribution made during the Qualified investment – an investment in properties,
rollover period (see definition on this page) and designated including money, guaranteed investment certificates
as exempt by the survivor in prescribed form in connection (GICs), government and corporate bonds, mutual funds,
with a payment received from the deceased holder’s TFSA. and securities listed on a designated stock exchange. The
types of investments that qualify for TFSAs are generally
Exempt period – period that begins when the holder dies
similar to those that qualify for registered retirement
and that ends at the end of the first calendar year that
savings plans (RRSPs).
begins after the holder’s death, or when the trust ceases to
exist, if earlier. Qualifying arrangement – an arrangement that is
entered into after 2008 between an issuer and an individual
Fair market value (FMV) – usually the highest dollar value
(other than a trust) who is at least 18 years of age, that is:
you can get for property in an open and unrestricted
market between a willing buyer and a willing seller who ■ an arrangement in trust with an issuer that is authorized
are acting independently of each other. For information on in Canada to offer to the public its services as a trustee;
the valuation of securities of closely-held corporations, see
■ an annuity contract with an issuer that is a licensed
Information Circular IC89-3, Policy Statement on Business
annuities provider; or
Equity Valuations.
■ a deposit with an issuer that is a person who is a
Holder – the individual who originally entered into the
member, or is eligible to be a member, of the Canadian
TFSA arrangement and, after the death of the holder,
Payments Association, or a credit union that is a
includes a survivor.
shareholder or member of a “central” for the purposes
Issuer – a trust company, a licensed annuities provider, of the Canadian Payments Act.
a person who is, or is eligible to become, a member of the
Qualifying transfer – a direct transfer between a holder’s
Canadian Payments Association or a credit union with
TFSAs, or a direct transfer between a holder’s TFSA and the
which an individual has a qualifying arrangement.
TFSA of their current or former spouse or common-law
Non-arm’s length – relationship or transaction between partner if the transfer relates to payments under a decree,
two persons who are related to each other. order, or judgment of a court, or under a written agreement
relating to a division of property in settlement of rights
However, a non-arm's length relationship might also exist
arising from the breakdown of their relationship and they
between unrelated individuals, partnerships, or
are living separate and apart at the time of the transfer.
corporations, depending on the circumstances. For more
information, see the definition for “arm’s length” on page 4. Qualifying portion of a withdrawal – the portion of a
withdrawal from a TFSA (excluding a qualifying transfer
Non-qualified investment – any property that is not a
or a specified distribution), made in the year, that was
qualified investment for the trust. See the definition of
required to reduce or eliminate a previously determined
“Qualified investment” on this page.
excess amount.
Prohibited investment – an investment to which the TFSA
Rollover period – the period that begins when the TFSA
holder is closely connected. It includes:
holder dies and ends at the end of the calendar year that
■ a debt of the holder; follows the year of death.
■ a debt or equity investment in an entity in which the Self-directed TFSA – a vehicle that allows you to build and
holder has a significant interest (generally a 10% or manage your own investment portfolio by buying and
greater interest, taking into account non-arm’s length selling various types of investments.
holdings); and
Specified distribution – a distribution from a TFSA to the
■ a debt or equity investment in an entity with which the extent that it is, or is reasonably attributable to, an amount
holder does not deal at arm’s length. that is:
A prohibited investment does not include a mortgage loan ■ an advantage;
that is insured by the Canada Mortgage and Housing ■ specified non-qualified investment income;
Corporation or by an approved private insurer. It also does
not include certain investment funds. ■ income that is taxable in a TFSA trust; or
■ income earned on excess contributions or non-resident
Qualified donee – the Income Tax Act permits qualified
contributions.
donees to issue official tax receipts for donations they
receive from individuals or corporations. Some examples A specified distribution does not create or increase unused
of qualified donees are registered charities, Canadian TFSA contribution room in the following year, nor does it
municipalities, registered Canadian amateur athletic reduce or eliminate an excess TFSA amount.
associations, the United Nations or one of their agencies, Specified non-qualified investment income – income
or universities outside Canada that accept Canadian (including a capital gain) that is reasonably attributable,
students. directly or indirectly, to an amount that is taxable for any
TFSA of the holder (for example, subsequent generation
income earned on non-qualified investment income or on
income from a business carried on by a TFSA).
Spouse – a person to whom the holder is legally married.

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Successor holder – in provinces or territories that permit a valid social insurance number (SIN) to set money aside
TFSA beneficiary designation, a successor holder is a tax-free throughout their lifetime.
spouse or common-law partner of the holder at the time of Contributions to a TFSA are not deductible for income tax
death, named by the deceased as the successor holder of the purposes. Any amount contributed as well as any income
TFSA, who acquires all of the rights of the holder under the earned in the account (for example, investment income and
arrangement including the right to revoke any beneficiary capital gains) is generally tax-free, even when it is
designation. This spouse or common-law partner becomes withdrawn.
the new account holder. Administrative or other fees in relation to a TFSA and any
Survivor – an individual who is, immediately before the interest on money borrowed to contribute to a TFSA are not
TFSA holder’s death, a spouse or common-law partner of tax deductible.
the holder.
Types of TFSAs
Note There are three different types of TFSAs that can be offered:
For 2009 and subsequent tax years, a survivor may a deposit, an annuity contract, and an arrangement in trust.
designate a successor holder (for example, a new spouse
or common-law partner of the survivor in case of Banks, insurance companies, credit unions, and trust
remarriage of the survivor). A successor holder companies can all issue TFSAs.
designation is effective only if it is recognized under
For more information about a certain type of TFSA, contact
applicable provincial or territorial law and the successor
a TFSA issuer.
holder acquired all of the survivor’s rights as holder,
including the right to revoke any previous beneficiary
designation made by the survivor in relation to the
TFSA. Who can open a TFSA?
Survivor payment – a payment received by a survivor
during the rollover period, either directly or indirectly out
of or under an arrangement that ceased to be a TFSA A ny individual who is 18 years of age or older and who
has a valid SIN is eligible to open a TFSA.
because of the holder’s death. Note
Swap transaction – a transfer of property (other than a A person determined to be a non-resident of Canada for
contribution or distribution) that occurs between the trust income tax purposes can hold a valid SIN and be
and the holder of a TFSA or a person dealing at non- allowed to open a TFSA however, any contributions
arm's length with the holder. It does not include a transfer made while a non-resident will be subject to a 1% tax for
involving a non-qualified or a prohibited investment where each month the contribution stays in the account. For
the holder may be entitled to a refund of tax pursuant to more information see “ Non-residents of Canada” on
subsection 207.04(4) or a transfer between TFSAs of the page 10.
holder. You cannot open a TFSA or contribute to one until you
Unused TFSA contribution room – the amount, either turn 18. However, when you turn 18, you will be able to
positive or negative, at the end of a particular calendar year contribute up to the full TFSA dollar limit for that year.
after 2008, determined by the holder’s unused TFSA
contribution room at the end of the year preceding the Example
particular year, Julie turns 18 on May 13, 2014. She will not be able to open
Plus: and contribute to a TFSA until that date. However, as of
May 13, 2014, she can open a TFSA and contribute the full
■ the total amount of all withdrawals made from the 2014 TFSA dollar limit.
holder’s TFSA in the preceding calendar year, excluding
a qualifying transfer or a specified distribution; and Note
■ the TFSA dollar limit for the particular year if, at some In certain provinces and territories, the legal age
point in that year, the individual is at least 18 years old (depends on the age of majority) at which an individual
and a resident of Canada. In all other cases, the amount can enter into a contract (which includes opening a
is nil. TFSA) is 19. In 2009 or later, in these jurisdictions, an
18-year-old who would otherwise be eligible
Minus: accumulates TFSA contribution room for that year and
■ the total of all TFSA contributions made by the holder in carries it over to the following year.
the particular year excluding a qualifying transfer or an The account holder is the only person who can contribute
exempt contribution. to their TFSA. You can give your spouse or common-law
partner money to contribute to their own TFSA without
either that amount or any earnings on the amount being
attributed back to you. The total of all contributions your
What is a TFSA? spouse or common-law partner makes to their TFSA must
not be more than their TFSA contribution room. See “TFSA

T he TFSA program began in 2009. It is a way for

individuals who are 18 years or older and who have a
contribution room” on this page for more information.

6 www.cra.gc.ca
 Management fees related to a TFSA trust and paid by the
How to open a TFSA holder are not considered to be contributions to the TFSA.
The payment of investment counsel, transfer, or other fees

Y ou can have more than one TFSA at any given time, but
the total amount you contribute to all your TFSAs
cannot be more than your available TFSA contribution
by a TFSA trust will not result in a distribution
(withdrawal) from the TFSA trust.

room for that year.

TFSA contribution room
To open a TFSA, you must do the following:
Your TFSA contribution room is the maximum amount that
1. Contact your financial institution, credit union, or you can contribute to your TFSA.
insurance company (issuer); and
Starting in 2009, your TFSA contribution room accumulates
2. Provide the issuer with your SIN and date of birth so every year, if at any time in the calendar year you are
the issuer can register your qualifying arrangement as 18 years of age or older, have a valid SIN and are a resident
a TFSA. Your issuer may ask for supporting of Canada.
documents.
You will accumulate TFSA contribution room for each
Note year even if you do not file an income tax and benefit
If you do not provide this information or provide return or open a TFSA.
incorrect information to your issuer, the registration of
The annual TFSA dollar limit for the years 2009, 2010, 2011
your TFSA may be denied. If your TFSA is not
and 2012 was $5,000.
registered, any income that is earned will have to be
reported on your income tax and benefit return. The annual TFSA dollar limit for the years 2013 and 2014
is $5,500.
Self-directed TFSA
Investment income earned by, and changes in the value of
You can set up a self-directed TFSA if you prefer to build your TFSA investments will not affect your TFSA
and manage your own investment portfolio by buying and contribution room for current or future years.
selling different types of investments. For more
information, contact a TFSA issuer.
Example
Brayden was eager to open his TFSA, but he didn’t turn 18
until December 21, 2011. On January 4, 2012, he opened a
Contributions TFSA and contributed $10,000 ($5,000 for 2011 plus $5,000
for 2012 - the maximun TFSA dollar limits for those years).
On the advice of his broker, he had opened a self-directed
T he maximum amount that you can contribute to your
TFSA is limited by your TFSA contribution room. TFSA and invested in stocks that outperformed the market.
By the end of 2012, the value in Brayden’s TFSA had
All TFSA contributions made during the year, including the increased to $11,800. Brayden was worried that for 2013, he
replacement or re-contribution of withdrawals made from would only be able to contribute $3,700 (the TFSA dollar
a TFSA, will count against your contribution room. limit of $5,500 for 2013 less the $1,800 increase in value in
Note his TFSA through 2012). Neither the earnings generated in
Qualifying transfers, exempt contributions and the account nor the increase in its value will reduce the
specified distributions are not considered in the TFSA contribution room in the following year, so Brayden
calculation of contribution room. can contribute up to another $5,500 in 2013 to his TFSA.

At any time in the year, if you contribute more than your

allowable TFSA contribution room, you will be considered Where can I find my TFSA contribution
to be over-contributing to your TFSA and you will be room information?
subject to a tax equal to 1% of the highest excess TFSA
amount in the month, for each month that the excess Your TFSA contribution room information can be found by
amount remains in your account. For more information, see using one of the following services:
“Tax payable on excess TFSA amount” on page 15. ■ My Account at www.cra.gc.ca/myaccount;
You do not need to have earned income to contribute to a ■ Quick Access at www.cra.gc.ca/quickaccess; or
TFSA.
■ Tax Information Phone Service (TIPS) at 1-800-267-6999.
As the account holder you are the only person who can
contribute to your TFSA. You can give your spouse or In addition, if you want to receive a TFSA Room Statement,
common-law partner money to contribute to their own call us. You can also ask for a TFSA Transaction Summary
TFSA (without having that amount, or any earnings from that shows the information that we received from your
that amount being attributed back to you), but the total TFSA issuer(s) about your contributions and withdrawals.
contributions you each make to your own TFSAs cannot be If the information that we have about your TFSA
more than your individual TFSA contribution room. For transactions is not complete or if you have made
more information, see “TFSA contribution room” on this contributions to your TFSA this year, use Form RC343,
page. Worksheet – TFSA contribution room to calculate your TFSA
Contributions made to a TFSA are not tax- deductible. contribution room for the current year. If we have deemed

www.cra.gc.ca 7
your unused TFSA contribution room to be a specific His unused TFSA contribution room at the end of 2012
amount, do not use this form; call us for more information. was $4,500 ($5,000 – $500).
You should keep records about your TFSA transactions Josh calculated his TFSA contribution room for the
to ensure that you do not exceed your TFSA contribution beginning of 2013 as follows:
room. We will also keep track of an individual’s
TFSA contribution room at the beginning of 2013
contribution room and determine the balance of room for
each eligible individual based on information provided TFSA contribution room
annually by the TFSA issuers. at the beginning of 2012 ........................................ $5,000
Minus: Contributions made in 2012 .................... – $500
Representatives Unused TFSA contribution room at the end
of 2012...................................................................... $4,500
You can authorize a representative (such as your spouse or Plus: Total withdrawals made in 2012 ................ + $4,000
common-law partner, tax preparer, or accountant) to get Plus: 2013 TFSA dollar limit ................................. + $5,500
information about your tax matters and give us information TFSA contribution room
on your behalf. We will accept information from and/or at the beginning of 2013 ....................................... $14,000
provide information to your representative only after we
are satisfied that you have authorized us to do so through
www.cra.gc.ca/myaccount, in writing, or by sending a
completed Form T1013, Authorizing or Cancelling a An individual will not accumulate TFSA contribution room
Representative. Your authorization will stay in effect until it for any year during which the individual is a non-resident
is cancelled by you or your representative, it reaches the of Canada throughout the entire year.
expiry date you choose, or we receive notification of your
death. You or your representative can cancel by telephone, The TFSA dollar limit is not prorated in the year an
in person, or in writing, the consent you gave. individual:
If you were the legal representative of a deceased person, ■ turns 18 years old;
see Guide T4011, Preparing Returns for Deceased Persons, to
■ dies; or
know what documents are required.
■ becomes a resident or a non-resident of Canada.
For more information, go to www.cra.gc.ca/myaccount, or
see Form T1013, Authorizing or Cancelling a Representative.
How is your TFSA information
How your TFSA contribution room is obtained?
determined By the last day of February of the following year, all issuers
are required to electronically submit a TFSA record to us
The TFSA dollar limit is indexed based on the inflation rate.
for each individual who has a TFSA.
The indexed amount is cumulative and will be rounded to
the nearest $500. If you disagree with any of the information on your TFSA
Room Statement, or TFSA Transaction Summary, such as dates
The TFSA contribution room is made up of:
or amounts of contributions or withdrawals which your
■ your TFSA dollar limit; TFSA issuer has provided to us, contact your TFSA issuer.
If any information initially provided by the issuer
■ any unused TFSA contribution room from previous regarding your account is incorrect, the issuer must send us
years; and an amended record so that we can update our records.
■ any withdrawals made from the TFSA in the previous You can view your TFSA Transaction Summary online. Go to
year. www.cra.gc.ca/myaccount to see all the contributions and
Note withdrawals made to your TFSA.
Qualifying transfers, exempt contributions and
specified distributions are not considered in the
calculation of contribution room.
Types of permitted investments
Example
In March 2009, 2010 and 2011, Josh contributed $5,000 to his
TFSA, the full amount of his contribution room for each
G enerally, the types of investments that are permitted in
a TFSA are the same as those permitted in a registered
retirement savings plan (RRSP). These would include:
year. He did not make any other contributions or withdraw
any funds. As a result of his $5,000 contribution in 2011, his ■ cash;
unused TFSA contribution room at the end of 2011 was
■ mutual funds;
zero.
■ securities listed on a designated stock exchange;
His TFSA contribution room at the beginning of 2012
was $5,000 (the 2012 TFSA dollar limit). ■ guaranteed investment certificates (GICs);
On June 15, 2012, Josh made a contribution of $500. On ■ bonds; and
October 26, 2012, he withdrew $4,000.
■ certain shares of small business corporations.

8 www.cra.gc.ca
Foreign funds Withdrawals from a TFSA
You can contribute foreign funds to a TFSA. However,
your issuer will convert the funds to Canadian dollars
(using the exchange rate on the date of the transaction),
when reporting this information to us. The total amount of
A qualifying transfer from one TFSA to another is not
considered to be a withdrawal. For more information,
see “Qualifying transfers” on page 11.
your contribution, in Canadian dollars, cannot exceed your
TFSA contribution room.
Making withdrawals
If dividend income from a foreign country is paid to a
TFSA, the dividend income could be subject to foreign Depending on the type of investment held in your TFSA,
withholding tax. you can generally withdraw any amount from the TFSA at
any time. Withdrawing funds from your TFSA does not
reduce the total amount of contributions you have already
“In kind” contributions made for the year.
You can also make “in kind” contributions (for example, Withdrawals, excluding qualifying transfers and specified
securities you hold in a non-registered account) to your distributions (see “Definitions” beginning on page 4), made
TFSA, as long as the property is a qualified investment (see from your TFSA in the year will only be added back to your
“Qualified investment” definition on page 5). TFSA contribution room at the beginning of the following
You will be considered to have disposed of the property at year. See the example below.
its fair market value (FMV) at the time of the contribution.
If the FMV is more than the cost of the property, you will Example
have to report the capital gain on your income tax and In 2009 and 2010 Cedric contributed $5000 each year to his
benefit return. However, if the cost of the property is more TFSA. In 2011, Cedric is allowed to contribute $5,000. He
than its FMV, you cannot claim the resulting capital loss. contributes $2,000 for that year.
The amount of the contribution to your TFSA will be equal
to the FMV of the property. 2011 TFSA dollar limit........................................ $5,000
2011 contributions............................................... – $2,000
Unused TFSA contribution room
Transfers from your RRSP available for future years ................................... $3,000
If you want to transfer an investment from your RRSP to
In 2012, Cedric does not contribute to his TFSA, but he
your TFSA, you will be considered to have withdrawn the
makes a $1,000 withdrawal from his account (this
investment from the RRSP at its FMV, and that amount will
withdrawal will not be added to his TFSA contribution
be reported as an RRSP withdrawal, and must be included
room until 2013).
in your income in that year. The tax withheld on the
withdrawal can be claimed at line 437 of your income tax 2011 unused TFSA contribution room .............. $3,000
and benefit return. If the transfer into your TFSA takes 2012 TFSA dollar limit......................................... + $5,000
place immediately, the same value will be used as the 2012 unused TFSA contribution room
amount of the contribution to the TFSA. If the contribution available for future years .................................... $8,000
to the TFSA is deferred, the amount of the contribution will
be the FMV of the investment at the time of that Cedric’s TFSA contribution room for 2013
contribution. 2012 unused TFSA contribution room .............. $8,000
You cannot exchange securities for cash, or other securities 2012 withdrawal................................................... + $1,000
of equal value, between your accounts, either between two 2013 TFSA dollar limit......................................... + $5,500
registered accounts or between a registered and a TFSA contribution room at
non-registered account (swap). For more information, see the beginning of 2013 .......................................... $14,500
the definition “Swap transactions” on page 6.

www.cra.gc.ca 9
Replacing withdrawals Other ties that may be relevant include:
If you decide to replace or re contribute all or a portion of ■ a Canadian driver’s licence;
your withdrawals into your TFSA in the same year, you can
only do so if you have available TFSA contribution room. If ■ Canadian bank accounts or credit cards; and
you re-contribute but do not have contribution room, you ■ hospitalization and medical insurance coverage
will have over-contributed to your TFSA in the year. You from a province or territory of Canada.
will be subject to a tax equal to 1% of the highest excess
TFSA amount in the month, for each month that the excess For more information on residential ties, see Income tax
amount remains in your account. See example below. folio S5-F1-C1, Determining an Individual’s Residence Status.,
or call the International Enquiries for Individuals and
For more information on withdrawing amounts from your Trusts at one of the following numbers: 1-855-284-5942
TFSA, contact your TFSA issuer. (from anywhere in Canada and the United States), or
613-940-8495 (from outside Canada and the United States------
Example we accept collect calls by automated response. Please note
Since opening her TFSA in 2009, Jenny has contributed the that you may hear a beep and experience a normal
maximum TFSA dollar limit of $5,000 in each year. By the connection delay).
end of 2012, she has accumulated a total of $20,000 in her If you become a non-resident of Canada, or are considered
TFSA account. In 2013, the TFSA dollar limit is increased to to be a non-resident for income tax purposes:
$5,500 so Jenny makes a $5,500 contribution. Later that
year, she withdraws $3,000 for a trip. Unfortunately, her ■ you will be allowed to keep your TFSA and you will not
plans change and she cannot go. Since Jenny already be taxed in Canada on any earnings in the account or on
contributed the maximum to her TFSA earlier in the year, withdrawals from it;
she has no TFSA contribution room left. ■ no TFSA contribution room will accrue for any year
If Jenny wishes to re-contribute part or all of the $3,000 she throughout which you are a non-resident of Canada; and
withdrew, she will have to wait until the beginning of 2014 ■ any withdrawals made during the period that you
to do so. The $3,000 will be added to her TFSA contribution were a non-resident will be added back to your TFSA
room at the beginning of 2014. contribution room in the following year, but will only
If she re-contributes any of the withdrawn amount before be available if you re-establish your Canadian residency
2014, she will have an excess amount in her TFSA and will status for tax purposes.
be charged a tax equal to 1% of the highest excess TFSA You can contribute to a TFSA up to the date that you
amount for each month that the excess remains in her become a non-resident of Canada. The annual TFSA dollar
account. limit is not pro-rated in the year of emigration or
immigration.
If you make a contribution, except for a qualifying transfer
Non-residents of Canada or an exempt contribution, while you are a non-resident,
you will be subject to a 1% tax for each month the
contribution stays in the account. You may also liable for
Y ou may be considered a non-resident for tax purposes
if you:
other taxes. For more information, see “Tax payable on
non-resident contributions” on page 17.
■ normally, customarily, or routinely live in another
country and are not considered a resident of Canada; or
■ do not have residential ties in Canada; and one of the Impact on your government
following situations applies:
benefits and credits
– you live outside Canada throughout the tax year; or
– you stay in Canada for less than 183 days in the tax
year. Y our federal income-tested benefits and credits such as:
old age security (OAS) benefits, the guaranteed income
Supplement (GIS), or employment insurance (EI) benefits
Even if you no longer live in Canada, you may have
will not be reduced as a result of the income you earn in
residential ties in Canada that are sufficient for you to be
your TFSA or the amount you withdraw from your TFSA.
considered a factual or deemed resident of Canada. In these
cases, the regular rules for opening a TFSA still apply.
Residential ties include:
■ a home in Canada;
■ a spouse or common-law partner or dependants in
Canada;
■ personal property in Canada, such as a car or furniture;
or
■ social ties in Canada.

10 www.cra.gc.ca
The income earned in the account or amounts withdrawn be considered a direct transfer and could have tax
from a TFSA will also not affect your eligibility for federal consequences.
credits, such as the Canada child tax benefit (CCTB), the
In this scenario, the funds will be treated as a regular
working income tax benefit (WITB), the goods and services
contribution which will reduce your TFSA contribution
tax/harmonized sales tax credit (GST/HST), or the age
room for the year. If you do not have sufficient
amount.
contribution room, you will have over-contributed to
You can withdraw money from the TFSA at any time, your TFSA and will be subject to a 1% tax on the highest
for any reason, with no tax consequences, and without excess amount in the month, for each month that the
affecting your eligibility for federal income-tested benefits excess remains in the account.
and credits.
Example
Example On January 5, 2013, Michel contributed $5,500 to his TFSA
Denis is retired. In addition to his pension, he receives OAS in Bank “A” leaving him with a remaining TFSA
and Canada Pension Plan (CPP) benefits. He earns $500 a contribution room of zero.
year in interest income from his TFSA savings. Neither this
In July, he received his TFSA statement from Bank “A”
income nor any TFSA withdrawals will affect any federal
which showed there was only a minimal growth ($25) from
income-tested benefits or credits he receives. If he had
his investment. Michel decided to consult with other
earned $500 in a regular savings account instead, it would
financial institutions to see if they offered a better rate of
have to be included on his tax return and Denis would have
return for his TFSA investment. Michel found a better rate
to pay more tax and may have to repay some of his social
offered at another financial institution and decided to
benefits.
transfer the funds from his TFSA account to Bank “B.”

Funds For Michel’s TFSA contributions to be considered a

Funds in qualifying transfer, with no tax consequences, Bank “A”
Denis’s income outside a
a TFSA must complete a direct transfer of funds to Bank “B”.
TFSA
If, instead, Michel went into Bank “A” in July, and
Total pension income $48,250 $48,250
withdrew the amount in his TFSA and walked into Bank
Total CPP benefits $12,017 $12,017 “B” to open a new TFSA with a contribution of $5,025, the
Total OAS benefits $5,933 $5,933 contribution would be treated as an ordinary contribution
and because his unused TFSA contribution room was
Interest income to be reported $0 $500
on the tax return
already zero, he would have an excess TFSA amount of
$5,025 and would have to pay a 1% per month tax on the
Total income $66,200 $66,700 excess TFSA amount for as long as the excess TFSA amount
Fictitious base amount for remained in his account. The withdrawal from Bank “A”
$66,250 $66,250
social benefits repayments would be added back to his contribution room at the
Amount over base amount $0 $450 beginning of 2014.
Multiplied by 15% × 15% × 15% In addition, if Michel left his contribution to Bank “B” in
his TFSA for the remainder of the year, his tax would be
Amount to be included as a
$0 $67.50 calculated as follows:
social benefit repayment
■ Highest excess TFSA amount per month from July to
December = $5,025.
■ Tax = 1% per month on the highest excess amount =
Qualifying transfers $5,025 x 1% x 6 months, which is $301.50.

T ransfers between your own TFSAs and those completed

upon the breakdown of a marriage or common-law
partnership are considered qualifying transfers. All
Transfers upon breakdown of marriage
or common-law partnership
qualifying transfers must be completed by a financial When there is a breakdown in a marriage or common-law
institution. partnership, an amount can be transferred directly from
one individual’s TFSA to the other’s TFSA without
Transfers between your own TFSAs affecting either individual’s contribution room. The transfer
must be completed directly between the TFSAs by the
If you want to transfer funds from one TFSA to another issuer.
or from one issuer to another, there will be no tax
consequences if your issuer completes a direct transfer on
your behalf. For more information, contact your issuer.
Note
If you withdraw the funds yourself and contribute the
same funds to another TFSA, this transaction would not

www.cra.gc.ca 11
If you are in this situation you must meet the following Types of beneficiaries
conditions:
The types of beneficiaries for TFSA purposes are:
■ you and your current or former spouse or common-law
■ a survivor who has been designated as a successor
partner were living separate and apart at the time of the
holder; and
transfer; and
■ designated beneficiaries (for example, a survivor who
■ you are entitled to receive, or required to pay, the
has not been named as a successor holder), former
amount under a decree, order, or judgment of a court,
spouses or common-law partners, children, and qualified
or under a written separation agreement to settle rights
donees.
arising out of your relationship on or after the
breakdown of your relationship. Determining the type of beneficiary is an important initial
step and can be affected by:
When these conditions are met, the transfer is a qualifying
transfer and will not reduce the recipient’s eligible TFSA ■ designations which may have been made in the deceased
contribution room. Since this transfer is not considered a holder’s TFSA contract;
withdrawal, the transferred amount will not be added back
to the transferor’s contribution room at the beginning of the ■ the provisions of the deceased holder’s will, if there is
following year. one; and

Also, the transfer will not eliminate any excess TFSA ■ provincial or territorial succession legislation.
amount, if applicable, in the payer’s TFSA. Note
Note If you want to change a prior beneficiary designation,
If, instead of choosing to have the amount directly contact your TFSA issuer.
transferred, an individual chooses to receive the
settlement amount before deciding to contribute part or Successor holder
all of it to their own TFSA, then any such contribution is In provinces or territories that recognize a TFSA beneficiary
considered as a regular contribution that reduces the designation the survivor can be designated as a successor
balance of their TFSA contribution room. holder in the TFSA contract or in the will.
A survivor can be named in the deceased holder’s will as a
successor holder to a TFSA, if the provisions of the will
Death of a TFSA holder state that the successor holder acquires all of the holder’s
rights including the unconditional right to revoke any
beneficiary designation, or similar direction imposed by
A fter the holder of a TFSA dies, possible tax implications
may vary depending on one or more of the following
factors:
the deceased holder under the arrangement or relating to
property held in connection with the arrangement.

■ the type of TFSA; If named as the successor holder, the survivor will become
the new holder of the TFSA immediately upon the death of
■ the type of beneficiary(ies); the original holder.
■ whether any income was earned after the date of death;
and Example
■ how long, after the date of death, before amounts are Joan and her husband George lived in a province that
distributed to beneficiaries. recognizes a TFSA beneficiary designation. Joan was the
holder of a TFSA and designated George as the successor
Depending on the factors that apply, the following can be holder. Joan died on February 15, 2013. The value of her
affected: TFSA on that date was $10,000. There was no excess TFSA
amount in her account. Her estate was finally settled on
■ whether the deceased’s TFSA continues to exist or is
September 1, 2013. By that time, an additional $200 of
considered to have ceased;
income had been earned. Since George met all the
■ how income earned after the date of death may be conditions, he became the successor holder of Joan’s TFSA
reported and taxed; and as of the date of her death.
■ whether a beneficiary can contribute amounts received to The fair market value (FMV) of $10,000 as of the date of
their own TFSA, within certain limits, and whether such death is not taxable to George. Similarly, the $200 of income
a contribution would affect their unused TFSA earned after the date of death (and any subsequent income
contribution room. earned) is also not taxable to George. No T4A slip would be
issued and Form RC240, Designation of an Exempt
Contribution Tax-Free Savings Account (TFSA), is not
necessary in this situation.
This is because Joan was a resident, at the time of her death,
in a province that recognizes TFSA beneficiary
designations.

12 www.cra.gc.ca
This is the case for all three types of TFSAs: deposit, Also, the successor holder is deemed to have made, at
annuity contract, and trust arrangement. the beginning of the month following the date of death, a
contribution to their TFSA equal to the amount by which
The deceased holder is not considered to have received an
the excess TFSA amount is more than the total FMV, at the
amount from the TFSA at the time of death if the holder
date of the holder’s death, of all property under any
named his or her survivor as the successor holder of the
arrangements that ceased to be a TFSA because of the
TFSA. In this situation, the TFSA continues to exist and the
holder’s death. If that contribution creates an excess TFSA
successor holder assumes ownership of the TFSA contract
amount in the successor holder’s TFSA, they will be subject
and all of its contents. However, where the TFSA contract is
to a tax of 1% per month on the highest amount for each
a trust arrangement, the trust continues to be the legal
month they have an excess contribution.
owner of the property held in the TFSA.
The TFSA continues to exist and both its value at the date Example 1
of the original holder’s death and any income earned after Justin and Betty were a married couple. Each had available
that date continue to be sheltered from tax under the new TFSA contribution room of $5,000 at the beginning of 2011.
successor holder. Justin initially contributed $4,000 to his TFSA, and Betty
Except in cases where an excess TFSA amount remained in contributed $1,000 to hers. On June 12, 2011, Justin
the deceased holder’s TFSA at the time of their death, the contributed an additional $3,000 to his TFSA, bringing
successor holder’s unused TFSA contribution room is his total contributions for 2011 to $7,000.
unaffected by their having assumed ownership of the As Justin only had contribution room of $5,000 for 2011, he
deceased holder’s account. had an excess TFSA amount of $2,000. Justin passed away
The issuer will notify us of this change in ownership. on September 18, 2011, and the value of his TFSA on that
date was $7,000. Justin had named Betty as the successor
The successor holder, after taking over ownership of the holder of his TFSA in the event of his death. As Betty meets
deceased holder’s TFSA, can make tax-free withdrawals all the conditions to be considered a successor holder, she
from that account. The successor holder can also make new becomes the holder of the TFSA as of September 18, 2011.
contributions to that account, depending on their own
unused TFSA contribution room. Since an excess TFSA amount remained in Justin’s TFSA at
the time of his death, Betty is deemed to have made, as of
If the successor holder already had their own TFSA, then October 1, 2011, a $2,000 contribution to her TFSA (which
they would be considered as the holder of two separate is the excess amount in Justin’s TFSA). As Betty had only
accounts. If they wish, they can directly transfer part or previously contributed $1,000 to her own TFSA, she still
all of the value from one to the other (for example, to had unused TFSA contribution room for 2011 of $4,000.
consolidate accounts). This would be considered as a As a result, the $2,000 deemed contribution does not create
qualifying transfer and would not affect available TFSA an excess TFSA amount in her account. Therefore, there
contribution room. are no tax consequences to Betty based on this deemed
In certain cases, a survivor, designated as the successor contribution. Her unused contribution room for the rest of
holder of a TFSA, may not have a valid Canadian social 2011 is $2,000. However, the executor of Justin’s estate must
insurance number (SIN), which is one of the eligibility file Form RC243, Tax-Free Savings Account (TFSA) Return,
requirements for opening a TFSA. If the survivor is a and Form RC243-SCH-A, Schedule A – Excess TFSA
Canadian resident, they should apply to Service Canada Amounts, for the 2011 tax year reporting the excess in
to obtain a valid Canadian SIN. Justin's TFSA for the period from June up to and including
September 2011.
If the survivor is a non-resident, they should request an
individual tax number from the CRA by completing Example 2
Form T1261, Application for a Canada Revenue Agency From the scenario above, if Betty had initially contributed
Individual Tax Number (ITN) for Non-Residents. $4,500 to her own TFSA on January 10, 2011, instead of the
$1,000 previously noted, the $2,000 deemed contribution on
Excess TFSA amount at the time of death October 1, 2011, would have resulted in total contributions
to her TFSA in 2011 of $6,500.
If, at the time of death, there is an excess TFSA amount
in the deceased holder’s TFSA, a tax of 1% per month As Betty’s TFSA contribution room for 2011 was $5,000, as a
applies to the deceased holder on the highest excess TFSA result of the deemed contribution, she would be considered
amount for each month in which the excess remains, up to to have an excess TFSA amount of $1,500 ($6,500 – $5,000).
and including the month of death. The executor of In this situation, Betty would be subject to a tax of 1% per
the estate (liquidator) must file Form RC243, Tax-Free month on this excess TFSA amount for as long as it
Savings Account (TFSA) Return, and Form RC243-SCH-A, remained in her account.
Schedule A – Excess TFSA Amounts, for that period.

www.cra.gc.ca 13
Designated beneficiaries without them having to report any amount as income.
Designated beneficiaries may include a survivor who has Any amount paid to beneficiaries that represents an
not been named as a successor holder, former spouses or increase in the FMV after the date of death is taxable to
common-law partners, children, a designated subsequent the beneficiaries and has to be reported by them as income.
survivor holder who is the new spouse or common-law Such payments will appear in box 134, “Tax-Free Savings
partner of the successor holder, and qualified donees. Account taxable amount” in the “Other information”
section of a T4A, Statement of Pension, Retirement, Annuity,
A designated beneficiary will not have to pay tax on and Other Income (slip).
payments made out of the TFSA, as long as the total
payments do not exceed the FMV of all the property held The trust has the exempt period within which to distribute
in the TFSA at the time of the holder’s death. both the taxable and non-taxable amounts. The trustee
will designate the part of each payment that represents
Beneficiaries (other than a survivor) can contribute any of non-taxable FMV at the date of death with the rest being
the amounts they receive to their own TFSA as long as they taxable.
have unused TFSA contribution room available.
Payments of amounts earned above the FMV made by the
A survivor who is a beneficiary has the option to contribute trust to a non-resident beneficiary, including a non-resident
and designate all or a portion of a survivor payment as an survivor, from a deceased holder’s TFSA during the exempt
exempt contribution to their own TFSA, without affecting period are reported on an NR4, Statement of Amounts Paid or
their own unused TFSA contribution room, as long as they Credited to Non-Residents of Canada (slip), and are subject to
meet certain conditions and limits. For more information, non-resident withholding tax.
see “Designation of an exempt contribution by a survivor”
on the next page. If the trust continues to exist beyond the end of the exempt
period (for example, not all amounts from the deceased’s
If, at the time of death, there was an excess TFSA amount TFSA have been paid to beneficiaries), it will be taxable
in the deceased holder’s TFSA, a tax of 1% per month is from that point forward. It becomes a taxable inter vivos
applicable on the highest excess amount for each month trust with a tax year beginning January 1 of the following
in which the excess remained, up to and including the calendar year. The trust will be treated as having disposed
month of death. The executor of the estate (liquidator) must of and immediately reacquired its property for its FMV at
file Form RC243, Tax-Free Savings Account (TFSA) Return, that time. For as long as it continues to exist, the trust
and Form RC243-SCH-A, Schedule A – Excess TFSA would itself be taxable on any undistributed income
Amounts. (including, for its first tax year, any undistributed income
or gains during the exempt period) and required to
When no successor holder or beneficiary is designated in
annually file a T3RET, T3 Trust Income Tax and Information
the TFSA contract or will, the TFSA property is directed to
Return. The trust will also be required to prepare a
the deceased holder’s estate and distributed in accordance
T3, Statement of Trust Income Allocations and Designations
with the terms of the will.
(slip) in that year or later years for any distributions of
taxable amounts to beneficiaries.
General rules – Deposit or annuity contract
If there is no successor holder, the TFSA ceases to exist
when the holder of a deposit or an annuity contract under a Example
TFSA dies. The holder is considered to have disposed of the Martin’s mother, who lived in a province that recognizes a
contract or the deposit immediately before the time that the TFSA beneficiary designation, passed away on
TFSA ceased to exist for an amount equal to the FMV of all January 9, 2013. The value of her TFSA on that date was
the property held in the TFSA at the time of death. $11,000. There was no excess TFSA amount in her account.
In her TFSA contract, she had named Martin as the sole
After the holder’s death, the deposit or annuity contract is beneficiary. Her estate was settled on June 7, 2013. By that
considered to be a separate contract and is no longer time, $200 in additional income had been earned, and the
considered as a TFSA. All earnings that accumulate after full amount of $11,200 was paid to Martin.
the holder’s death will be taxable to the beneficiary.
The value of Martin’s late mother’s TFSA as of the date of
The normal rules apply for reporting income or gains her death—$11,000, is not taxable. The income earned after
accrued after the date of death, depending on the specific the date of her death, $200, is taxable to Martin. He will
characteristics of the deposit or annuity contract. For receive a T4A slip showing this amount in box 134
example, interest earned would be reported on a “Tax-Free Savings Account taxable amount” in the “Other
T5, Statement of Investment Income (slip). information” section. Martin can contribute any of the
amounts he receives to his own TFSA as long as he has
General rules – Arrangement in trust unused TFSA contribution room available.
If there is no successor holder, a TFSA that is an
arrangement in trust is deemed to continue and it remains
a non-taxable trust until the end of the exempt period. Designation of an exempt contribution by
a survivor
All income earned during the exempt period and paid to
the beneficiaries, will be included in their income, while If designated as a beneficiary, the survivor (defined on
earnings that accrued before death remain exempt. In other page 6) has the option to contribute and designate all or a
words, any amount up to the FMV of the deceased holder’s portion of a survivor payment as an exempt contribution to
TFSA as of the date of death can be paid to beneficiaries,

14 www.cra.gc.ca
their own TFSA, without affecting their own unused TFSA period following the holder’s death. If necessary, once the
contribution room, subject to certain conditions and limits. donation has been completed, it is possible to ask to have
the deceased’s tax return for the year of death adjusted in
Beneficiaries (other than the survivor) who receive a
order to claim the charitable donation tax credit.
payment from the deceased holder’s TFSA cannot
contribute and designate any amount as an exempt
contribution. Management fees
For the survivor to designate an exempt contribution, the Management fees related to a TFSA trust and paid by the
amount must be received and contributed to their TFSA holder are not considered to be contributions to the TFSA.
during the rollover period. Also, the survivor must The payment of investment counsel, transfer, or other fees
designate their survivor payments as an exempt by a TFSA trust will not result in a distribution
contribution on Form RC240, Designation of an Exempt (withdrawal) from the TFSA trust.
Contribution Tax-Free Savings Account (TFSA), and submit
the designation within 30 days after the day the
contribution is made. Tax payable on TFSAs
The total exempt contributions designated during the
rollover period cannot exceed the FMV of the deceased
holder’s TFSA at the time of death. G enerally, interest, dividends, or capital gains earned on
investments in a TFSA are not taxable—either while
held in the account or when withdrawn.
Generally, if the TFSA of the deceased holder includes an
excess TFSA amount at the time of death, if payments are There are, however, certain circumstances under which one
being received by more than one survivor, or if the survivor or more taxes may be payable with respect to a TFSA. The
payment and/or the contribution is made after the rollover following sections provide information and examples of
period, no amount of the survivor payment may be when and how these taxes are payable, and by whom.
designated as an exempt contribution. If any of these
Normally, in most TFSA situations, there is no tax payable,
circumstances are present, call us to find out whether a
and therefore, a TFSA return is not required; however,
designation can still be made.
where one or more of TFSA taxes are applicable, a TFSA
return must be completed and filed by June 30 of the year
Example following the calendar year in which the tax arose.
Emma died on February 2, 2013. She was living with her
common-law partner, Fred, in Ontario. The value of her
trusteed TFSA on that date was $9,000. There was no excess
Tax payable on excess TFSA amount
TFSA amount in her account. In her TFSA contract, she had You have an excess TFSA amount at any time in a year
not filled out the part about a successor holder, but she as soon as the total of all TFSA contributions you made
named Fred as the beneficiary. Her estate was settled on in the year (other than a qualifying transfer or an exempt
August 15, 2013. By that time, an additional $150 of income contribution) exceeds the total of your TFSA contribution
had been earned, and the full amount of $9,150 was paid to room at the beginning of the year, plus any qualifying
Fred. portion of a withdrawal made in the year up to that time.
The value of Emma’s TFSA as of the date of her death, The qualifying portion of the withdrawal is the amount of
$9,000, is not taxable. The additional income earned after the withdrawal or the previously determined excess TFSA
the date of death, $150, is taxable to Fred. His T4A slip will amount, whichever is less.
show an amount in box 134 “Tax-Free Savings Account
Any portion of a withdrawal that does not reduce or
taxable amount” in the “Other information” section.
eliminate a previously determined excess TFSA amount is
The amount paid to Fred, as the surviving common-law not a qualifying portion of the withdrawal and cannot be
partner, is considered a survivor payment. Since the used to reduce or eliminate any future excess TFSA amount
survivor payment was made during the rollover period, that may be created.
Fred can rollover up to $9,000 (the value of the TFSA as of
the date of death) to his own TFSA, as an exempt Example 1
contribution. In 2013, Judy begins the year with a TFSA contribution
An exempt contribution does not affect Fred’s unused room of $5,500.
TFSA contribution room. For the contribution of a survivor Judy's contributions and withdrawals for 2013 are the
payment to be considered an exempt contribution during following amounts:
the rollover period, Fred must designate it as such on
Form RC240, Designation of an Exempt Contribution Tax-Free ■ contribution on January 25 $4,000
Savings Account (TFSA), within 30 days after the ■ contribution on March 16 $1,500
contribution is made.
■ withdrawal on June 15 $2,000
■ contribution on August 23 $2,000
Donation to a qualified donee
■ withdrawal on September 8 $1,500
If a qualified donee was named as a beneficiary of the
deceased holder’s TFSA, the transfer of funds to the Judy’s first two contributions, in January and March,
qualified donee must generally occur within the 36-month reduced her TFSA contribution room to zero. Since her June

www.cra.gc.ca 15
withdrawal does not get added back to her contribution Example 4
room until the following year, her August contribution Jamal is a 43-year-old Canadian resident. He opened his
caused an excess TFSA amount of $2,000 in that month. Her TFSA in 2009 and made a $5,000 contribution in October
September withdrawal of $1,500 would be considered 2009. In 2010, Jamal made the following transactions during
a qualifying portion of the withdrawal in computing her the year:
highest excess amount for the following month, October.
■ contribution on January 6 $4,000
An excess TFSA amount of $1,500 remains until the end of
the year and she will have to pay a 1% tax for the months of ■ contribution on March 10 $500
August to December.
■ contribution on June 3 $2,700
Judy’s tax would be calculated as follows:
■ withdrawal on October 2 $800
■ Highest excess TFSA amount per month for August and
September = $2,000. Tax = 1% per month on the highest Jamal’s contribution room for 2010 was $5,000. The first
excess amount = $2,000 x 1% x 2 months, which is $40. contribution that created the excess TFSA amount was the
$2,700 contribution on June 3rd. As of that date, his total
■ Highest excess TFSA amount per month for October to contributions in 2010 were $7,200 ($4,000 + $500 + $2,700).
December = $1,500. Tax = 1% per month on the highest This means that as of June 3rd, he had an excess amount in
excess amount = $1,500 x 1% x 3 months, which is $45. his TFSA of $2,200 ($7,200 of total contributions minus
$5,000 of contribution room).
Judy’s withdrawals from her TFSA will be added to her
TFSA room for 2014. Jamal had to pay a tax on his excess contributions. This tax
was 1% of the highest excess TFSA amount in each month
Example 2
and applies until Jamal either withdraws the entire excess
Since opening his TFSA in 2010, Gilles, a 21-year-old
amount or until he becomes entitled to enough unused
Canadian resident, contributed $10,000 on June 4, 2010 and
TFSA contribution room to absorb the excess.
another $5,000 on February 6, 2011. On March 3, 2012, he
contributed an additional $7,000. Since Gilles’ TFSA In this example, Jamal’s tax was $138 for 2010, calculated
contribution room at the beginning of 2012 was only $5,000 as follows:
(the TFSA dollar limit for that year), his contribution of
$7,000 on March 3rd resulted, as of that date, in an excess ■ Highest excess TFSA amount per month for January to
TFSA amount of $2,000. May = 0. No tax applicable for those months.

On May 17, 2012, Gilles withdrew $3,200 from his TFSA. ■ Highest excess TFSA amount per month for June to
The qualifying portion of this withdrawal was $2,000, since October = $2,200. Tax = 1% per month on the highest
this was the maximum amount that eliminated the excess excess amount = $2,200 × 1% × 5 months, which was
amount in his account. $110.

No part of the $1,200 portion of his withdrawal (the full ■ Highest excess TFSA amount per month for November
amount of $3,200 less the qualifying portion of $2,000) and December = $1,400. Tax = 1% per month on the
could have been used in the year to reduce any later excess excess amount = $1,400 × 1% × 2 months, which was $28.
TFSA amount. In other words, if Gilles had made a new Although Jamal withdrew $800 in October, the tax was
contribution of $1,000 on July 6, 2012, it would still have calculated based on the highest excess TFSA amount in
resulted in an excess TFSA amount of $1,000, as of that each month. The highest excess TFSA amount in October
date, even though Gilles previously withdrew $1,200 more was still $2,200.
than his excess TFSA amount on May 17, 2012.
For the months of November and December, Jamal still had
Example 3 an excess TFSA amount, but because of the withdrawal he
Using the previous example, if Gilles had withdrawn $900 made, his remaining excess TFSA amount for those last
on May 17, 2012 (instead of withdrawing $3,200), the two months was $1,400 (the prior excess amount of $2,200
qualifying portion of the withdrawal would have been the less the withdrawal of $800).
full $900, since the entire amount would have reduced (but
not fully eliminate) his previously determined excess TFSA Therefore, in total for 2010, his tax was $138 ($110 for June
amount of $2,000. to October + $28 for November to December).

In this case, an excess TFSA amount of $1,100 would Beginning in 2011, Jamal’s TFSA contribution room was
remain in his account as of the May 17th withdrawal (the $3,600 which is calculated as follows:
previously determined excess TFSA amount of $2,000 ■ Jamal’s 2010 and 2011 TFSA limits ($5,000+$5,000)
minus the $900 qualifying portion of the withdrawal). If, in
this scenario, Gilles had made a new contribution of $1,000 ■ less Jamal’s contributions in 2010 ($7,200)
on July 6, 2012, it would result in an excess TFSA amount, ■ plus Jamal’s withdrawals from the TFSA in 2010 ($800).
as of that date, of $2,100 ($1,100 + $1,000).
Therefore, his TFSA contribution room at the beginning of
If, at any time in a month, you have an excess TFSA 2011 is $3,600.
amount, you are subject to a tax of 1% on your highest
excess TFSA amount in that month.

16 www.cra.gc.ca
The tax of 1% per month will continue to apply for each This tax of 1% per month is based on the highest excess
month that the excess amount remains in the TFSA. It will TFSA amount in your account for each month in which an
continue to apply until whichever of the following happens excess remains. This means that the 1% tax applies for a
first: particular month even if an excess amount was contributed
and withdrawn later during the same month.
■ the entire excess amount is withdrawn; or
■ for eligible individuals, the entire excess amount is Example 6
absorbed by additions to their unused TFSA contribution Theresa is a 31-year-old Canadian resident. She opened a
room in the following years. TFSA on February 6, 2009, and contributed $5,000 at that
time. In April of 2010, she contributed $5,000. In February
Example 5 2011, she contributed $3,000. Later in the year, she received
Luisa is a 60-year-old Canadian resident. She opened a a windfall of $4,100. She forgot that her contribution limit
TFSA in 2009 and contributed $5,000. On June 18, 2010, she for 2011 was $5,000, and she decided to contribute the
received a $12,000 bonus from work. She decided to entire $4,100 to her TFSA on October 30th.
contribute the entire amount on June 25, 2010.
After making this contribution, Theresa had an excess TFSA
Since the TFSA dollar limit for each year from 2009 to 2012 amount of $2,100 in her account. This is because her total
is $5,000 and assuming Luisa makes no further contributions as of October 30th were $7,100 ($3,000 +
contributions or withdrawals, she has to pay a tax on an $4,100), which exceeded her available contribution room of
excess TFSA amount in both 2010 and 2011. The amount of $5,000.
tax payable for each of those years was calculated as
Assuming Theresa made no further TFSA contributions
follows:
and no withdrawals during the remainder of 2011, she
2010 would have to pay a tax of $63 on her excess TFSA amount.
After making her $12,000 contribution on June 25th, Luisa This amount was calculated as 1% per month for each of
had an excess TFSA amount of $7,000 ($12,000 less her October to December × the highest excess amount in each
TFSA dollar limit of $5,000). The highest excess TFSA month. In other words, $2,100 × 1% × 3 months = $63.
amount that remained in her account was $7,000 for every
If, after making her $4,100 contribution on October 30, 2011,
month from June to December. This means she was subject
Theresa had realized her mistake and had withdrawn
to a tax payable of $490 ($7,000 × 1% × 7 months).
$2,100 on October 31st, she would still have to pay the 1%
2011 tax on the excess TFSA amount of $2,100 but only for the
Luisa’s unused TFSA contribution room at the end of 2010 month of October. Her tax payable would have been
was negative (–) $7,000. On January 1, 2011, she became $21 ($2,100 × 1% × 1 month).
entitled to her 2011 TFSA dollar limit of $5,000. Although
this helped to reduce the excess TFSA amount from $7,000 For any year in which tax is payable by the holder of a
to $2,000, it did not completely absorb it. Luisa continued TFSA on an excess TFSA amount in their account, it is
to have an excess TFSA amount of $2,000 in her account necessary to complete and send us Form RC243, Tax-Free
through all of 2011. She had to pay a tax of $240 Savings Account (TFSA) Return, and Form RC243-SCH-A,
($2,000 × 1% × 12 months). Schedule A – Excess TFSA Amounts.
2012 Under proposed changes, a TFSA return must be
Luisa’s unused TFSA contribution room at the end of 2011 completed and filed by June 30 of the year following the
was negative (–) $2,000. As of January 1, 2012, she was calendar year in which the tax arose.
entitled to a new TFSA dollar limit of $5,000. This fully
eliminated or absorbed the excess TFSA amount in her Effective October 17, 2009, any earnings or increase in value
account. Luisa had available contribution room of $3,000 reasonably attributable to deliberate excess contributions
and, as long as she does not contribute more than this will be considered an advantage and treated accordingly.
amount to her TFSA through the remainder of 2012, she For more information, see “Tax payable on an advantage”
would not have to pay any tax on an excess TFSA amount on page 19.
for 2012.

For distributions (withdrawals) occurring after

October 16th, 2009, a distribution from a TFSA that is a
specified distribution cannot reduce or eliminate an
individual’s excess TFSA amount.
This tax is similar to the tax of 1% per month on excess
RRSP contributions except that in the case of a TFSA, there
is no $2,000 “grace” amount. The tax of 1% on an excess
TFSA amount applies from the first $1 of excess
contributions.

www.cra.gc.ca 17
Tax payable on non-resident This tax, calculated on the full amount of the contribution,
contributions will apply for each month that any portion of the amount
contributed while a non-resident remains in the TFSA and
If, at any time during the year, your TFSA contains will continue to apply until whichever of the following
contributions (other than a qualifying transfer or an exempt happens first:
contribution) you made while a non-resident of Canada,
you will be subject to a tax of 1% per month on these ■ the contributions are withdrawn in full from the account
contributions. and designated as a withdrawal of non-resident
contributions; or

Example 1 ■ the individual becomes a resident of Canada.

Gemma is a 41-year-old Canadian resident. She opened a An individual is not subject to the tax of 1% on
TFSA in 2009 and contributed $5,000 in that year. In 2010, non-resident contributions for the month in which the full
she contributed $4,000 and on September 7, she became a amount of the contribution is withdrawn or, if applicable,
non-resident. On July 12, 2011, she contributed an the month in which Canadian residency is resumed.
additional $2,500 to her TFSA. By the end of 2011, Gemma
was still a non-resident of Canada, and she had not made Example 2
any withdrawals from her account. Hassan is 25 years old and opened a TFSA in 2009 and
For 2011, Gemma had to pay a tax on the contribution contributed $5,000 in both 2009 and 2010. When he was a
she made while she was a non-resident and she was also resident of Canada in 2011, his total contributions in 2011
subject to tax on the excess TFSA amount in her account. were $1,000, and he made no withdrawals. Hassan became
a non-resident of Canada on February 17, 2012. He
Gemma’s unused TFSA contribution room at the end of contributed $3,000 to his TFSA on August 9, 2012. He
2010 was $1,000 (the TFSA dollar limit of $5,000 less her re-established his Canadian residency for tax purposes on
contribution of $4,000). Gemma was not entitled to the December 8, 2012.
TFSA dollar limit of $5,000 for 2011 since she was a
non-resident throughout that entire year. Gemma’s $2,500 Hassan’s unused TFSA contribution room at the end of
contribution on July 12, 2011, resulted in an excess TFSA 2011 was $4,000 (the $5,000 limit for that year less the $1,000
amount in her account at that time of $1,500. This is the he contributed). Hassan also accumulated an additional
amount by which her contribution exceeded her available $5,000 TFSA dollar limit for 2012. This is because this
room. amount is not pro-rated in the year an individual becomes
a non-resident, and he was considered a Canadian resident
Gemma’s tax on non-resident contributions for 2011 was for part of 2012. This means that as of January 1, 2012,
$150 because the full amount of her $2,500 contribution Hassan has a total TFSA contribution room of $9,000 (the
was made while she was a non-resident and it remained in $4,000 carried over from the end of 2011 plus the annual
her account until the end of the year. Since the tax is equal limit of $5,000 for 2012).
to 1% per month, the tax on her non-resident contributions
was $150 ($2,500 × 1% × the 6 months from July to Even though he has unused TFSA contribution room, a tax
December 2011). is applicable if any contributions are made while he was a
non-resident. Since he contributed $3,000 while he was a
Since part of Gemma’s contribution while a non-resident non-resident, he would have to pay a tax of 1% of this
also created an excess TFSA amount ($1,500, as described amount for each month from August to November 2012.
above) in her account, she also had to pay the 1% tax per He is not subject to tax for December as he re-established
month on this amount from July to December 2011. Her Canadian residency in that month. Accordingly, Hassan
tax on her excess TFSA amounts was $90 had to pay $120 in tax based on his non-resident
($1,500 × 1% × 6 months). contribution ($3,000 × 1% × 4 months).
For 2011, Gemma had to pay a total tax of $240 on her
TFSA, made up of $150 in tax on her non-resident Note
contribution plus $90 in tax on her excess TFSA amount. Unlike in the case of excess TFSA contributions where a
Gemma will not accumulate any room in 2012 unless she partial withdrawal can reduce the tax payable, a partial
re-establishes Canadian residency in that year. She will withdrawal of a contribution made while a non-resident
have to withdraw the entire $2,500 she contributed while does not proportionately reduce the tax otherwise
she was a non-resident to avoid an additional tax of 1% per payable. It is necessary for the full amount of a
month on the non-resident contributions as well as on the non-resident contribution to be withdrawn in order for
$1,500 excess TFSA amount. the full tax to no longer apply.
For any year in which tax is payable by the holder of a
TFSA on contributions made while a non-resident, it is
necessary to complete and file Form RC243, Tax-Free
Savings Account (TFSA) Return, and Form RC243-SCH-B,
Schedule B – Non-Resident Contributions to a Tax-Free Savings
Account (TFSA).

18 www.cra.gc.ca
 Note Claiming a refund
In addition to the tax of 1% per month on the To claim a refund, send a letter explaining why you are
contributions made while a non-resident, you may also requesting a refund along with the documents detailing the
be subject to a separate tax of 1% per month if any of the information relating to the acquisition of the non-qualified
same contributions create an excess amount in your property, or of its becoming non-qualified, and of its
TFSA. To determine whether you have excess TFSA disposition. The documents must contain the name and
amounts, you will need to complete description of the property, the number of shares or units,
Form RC243-SCH-A, Schedule A – Excess TFSA Amounts. the date the property was acquired or became non-qualified
Under proposed changes, a TFSA return must be property and the date of the disposition or the date that the
completed and filed by June 30 of the year following the property became qualified.
calendar year in which the tax arose. If the disposition took place in the same year as the
acquisition, enter the refundable amount on the line in
Tax payable on non-qualified Section 2 of the TFSA return, and attach the documents to
investments. your return. If the property disposed of was acquired in a
previous year, send a letter and the documents to:
If, in a calendar year, a trust governed by a TFSA acquires
property that was a non-qualified investment or if Canada Revenue Agency
previously acquired property becomes non-qualified, there TFSA Processing Unit
are consequences in terms of reporting requirements and Post Office Box 9768 Station T
tax payable on the part of the TFSA trust as well as the Ottawa ON K1G 3X9
holder of the TFSA.
Reporting requirements by a trust governed
For the purposes of TFSA taxes, if a trust governed by a
TFSA holds property at any time that is, for the trust, both a by a TFSA
prohibited investment and a non-qualified investment, the The TFSA issuer must, by no later than the end of February
property is not considered to be at that time a non-qualified in the year following the year in which the non-qualified
investment, but remains a prohibited investment. property was acquired or previously acquired property
became non-qualified, provide relevant information to us
Reporting requirements and tax payable by and the holder of the TFSA. This information includes,
where applicable, description of the properties, dates of
the TFSA holder (non-qualified investment) acquisition or disposition, and the FMV at the relevant
A one-time tax is payable by the holder of a TFSA when a times. The TFSA holder needs this information to
non-qualified investment is acquired or when a previously determine the amount of any tax payable or of any possible
acquired qualified investment becomes non-qualified. refund of tax previously paid.
The tax is equal to 50% of the fair market value (FMV) of If the non-qualified investment becomes a qualified
the property at the time it was acquired or it became investment while it is held by a trust governed by a TFSA,
non-qualified. the trust is considered to have disposed of and immediately
An individual subject to this tax must complete and file re-acquired the property at its FMV.
Form RC243, Tax-Free Savings Account (TFSA) Return. It should be noted that the trust is required to file a
Under proposed changes, a TFSA return must be T3RET, T3 Trust Income Tax and Information Return if there is
completed and filed by June 30 of the year following the any income or gains earned in the year by the non-qualified
calendar year in which the tax arose.Refund of taxes paid. investments.

The TFSA holder may be entitled to a refund of the

one-time 50% tax paid on non-qualified investments held in
Tax payable on prohibited investments
the account before the end of the calendar year following If, in a calendar year, a trust governed by a TFSA acquires
the calendar year in which the liability for the tax arose, or property that is a prohibited investment or if previously
a later time as permitted by the Minister, if either: acquired property becomes prohibited, there are
consequences for the TFSA holder in terms of reporting
■ the TFSA trust disposes of the non-qualified investment; requirements and tax payable.
or
For the purposes of TFSA taxes, if a trust governed by a
■ the property ceases to be a non-qualified investment. TFSA holds property at any time that is, for the trust, both
Under unusual circumstances, the Minister may consider a prohibited investment and a non-qualified investment,
refunding the tax if the disposition takes place at a later the property is not considered to be, at that time, a
time. However, no refund will be issued if it is reasonable non-qualified investment, but remains a prohibited
to expect that the holder knew, or should have known, at investment.
the time the property was obtained by the TFSA trust, that
the property was, or would become a non-qualified
investment.

www.cra.gc.ca 19
Reporting requirements and tax payable by relation to their TFSA during the year, a tax is payable
the TFSA holder (prohibited investment) which is:
A one-time tax is payable by the holder of a TFSA ■ in the case of a benefit, the FMV of the benefit; and
when a prohibited investment is acquired or when a
■ in the case of a loan or a debt, the amount of the loan
previously-acquired property becomes a prohibited
or debt.
investment.
For a more complete definition of an advantage, see the
If the prohibited investment ceases to be a prohibited
“Definitions” section starting on page 4.
investment while it is held by the trust, the trust is
considered to have disposed of and immediately The tax payable on an advantage extended in relation to
re-acquired the property at its FMV. a TFSA may apply to the holder of the TFSA or the TFSA
issuer, depending on the specifics of each situation.
The tax is equal to 50% of the FMV of the property at the
time it was acquired or it became prohibited. If the advantage is considered to be extended by the TFSA
issuer, or by a person dealing at non-arm’s length with the
For transactions after October 16, 2009, the income or
issuer, the issuer is liable to pay the tax, rather than the
capital gain that is reasonably attributable to a prohibited
holder.
investment is deemed to be a benefit under the definition of
“advantage” and is subject to tax under the advantage An individual subject to this tax must complete and file
rules. For more information, see “Tax payable on an Form RC243, Tax-Free Savings Account (TFSA) Return.
advantage” on the this page.
Under proposed changes, a TFSA return must be
Under proposed changes, a TFSA return must be completed and filed by June 30 of the year following the
completed and filed by June 30 of the year following the calendar year in which the tax arose.
calendar year in which the tax arose.
Note
If, in the same calendar year, an individual has to pay
Refund of taxes paid tax on an advantage related to the same contributions
The TFSA holder may be entitled to a refund of the that also results in them being liable to pay tax on excess
one-time 50% tax paid on prohibited investments held in TFSA contributions or tax on non-resident contributions,
the account if, before the end of the calendar year following the tax payable on the advantage for the year will be
the calendar year in which the liability for the tax arose, or reduced by the amount of these two taxes.
a later time as permitted by the Minister, if either:
■ the TFSA trust disposes of the prohibited investment; or TFSA return and payment of taxes
■ the property ceases to be a prohibited investment. Most TFSA holders have no tax payable related to their
TFSA investments, and no TFSA tax return has to be filed.
Under unusual circumstances, the Minister may consider However, when TFSA taxes are applicable for a year,
refunding the tax if the disposition takes place at a later Form RC243, Tax-Free Savings Account (TFSA) Return, must
time. However, no refund will be issued if it is reasonable be filed by June 30, of the following year. Any tax owing
to expect that the holder knew, or should have known, at must also be paid by that date.
the time the property was obtained by the TFSA trust, that
the property was, or would become a prohibited The RC243-SCH-A, Schedule A – Excess TFSA Amounts and
investment. RC243-SCH-B, Schedule B – Non-Resident Contributions to a
Tax-Free Savings Account (TFSA) will assist you in
determining your tax liability.
Claiming a refund
To claim a refund, send a letter explaining why you are If a TFSA return is required but has not been filed, we may
requesting a refund along with the documents detailing use information provided by your issuers to calculate any
the acquisition of the prohibited property, or of its tax payable by you.
becoming prohibited, and of its disposition. The documents You can view filed TFSA returns and schedules online at
must contain the name and description of the property, the www.cra.gc.ca/myaccount.
number of shares or units, the date the property was
acquired or became prohibited property and the date of the
disposition or the date that the property became or ceased Proposed TFSA return explained
to be prohibited. Annually, we send out a letter and a proposed TFSA return
to Canadians who may have over contributed to their
Send your letter to: TFSA. You may also receive a proposed TFSA return if you
Canada Revenue Agency made contributions to your TFSA while you were not a
TFSA Processing Unit resident of Canada. If you receive a letter, it does not
Post Office Box 9768 Station T automatically mean that you owe tax. It may just mean that
Ottawa ON K1G 3X9 more information is required.

Tax payable on an advantage

If the holder of a TFSA or a person dealing at non-arm’s
length with the holder was provided with an advantage in

20 www.cra.gc.ca
The proposed TFSA return package What should you do if you disagree
The proposed TFSA return package includes the following: with your assessment?
■ Cover letter – It provides general information about If you disagree with the assessment or reassessment of
TFSA rules and instructions regarding what you need your return, contact us for more information. If you still
to do to respond to the proposed return. disagree, you can make a formal objection by sending a
■ RC243-P, Proposed Tax-Free Savings Account (TFSA) completed Form T400A, Objection – Income Tax Act, or a
Return – This proposed TFSA return shows the taxes signed letter to the Chief of Appeals at your tax services
we have calculated and is based on the information we office or tax centre within 90 days of the date of the notice
received from your issuers. The proposed TFSA return is of assessment or notice of reassessment.
not a formal assessment of tax. For more information, see Pamphlet P148, Resolving your
■ RC324, Tax-Free Savings Account (TFSA) Detailed Excess Dispute: Objections and Appeal Rights under the Income Tax
Amount Calculation – This sheet is sent only if you had Act.
an excess amount in your TFSA at any time in the year. If we do not receive a response from you, we will issue
■ TFSA Transaction Summary – This shows your an assessment based on the information on file. This
contributions to and withdrawals from your TFSAs for assessment will include any penalties and interest that
the year as submitted by your issuers. may apply.

■ Return envelope – This is provided to mail your return

and payment or additional documentation, as applicable, Online services
to the TFSA Processing Unit.

Responding to the proposed return package My Account

This proposed return does not represent a formal Using the CRA’s My Account service is a fast, easy, and
assessment of tax. Although you cannot file a Notice secure way to access and manage your tax and benefit
of Objection on a proposed TFSA return, the following information online, seven days a week! If you are not
three options are available to you: registered with My Account but need information right
away, use Quick Access to get fast, easy, and secure access
1. If you agree with the information in the attached
to some of your information.
proposed return, sign, date, and include your SIN on
the return. Send it to us along with your payment in You can use either your CRA user ID and password or your
the enclosed addressed envelope. We will issue an online banking user ID and password to log in to
assessment based on this return. My Account.
2. If the information on the TFSA Transaction Summary For more information, go to www.cra.gc.ca/myaccount.
appears to be incorrect or incomplete, contact your
financial institution(s) and ask them to send us
amended TFSA records. In addition, let us know about
My Payment
this by calling 1-800-959-8281. My Payment is a self-service option that allows individuals
and businesses to make payments online, from an account
3. If you do not agree with the proposed TFSA return or at a participating Canadian financial institution. For more
you would like us to review your situation, you can
information, go to www.cra.gc.ca/mypayment.
send us a letter to the address below. Include an
explanation with as much information as possible and Electronic payments
any additional documentation about the excess
contributions. Make your payment online using the CRA’s My Payment
service at www.cra.gc.ca/mypayment or using your
Canada Revenue Agency financial institution’s telephone or Internet banking
TFSA Processing Unit services. For more information, go to
Post Office Box 9768 Station T www.cra.gc.ca/payments or contact your financial
Ottawa ON K1G 3X9
institution.
We will review your request and send you a letter
explaining our decision. If we do not receive a response
from you, we will issue an assessment based on the
information on file. This assessment will include any
penalties and interest that may apply.

www.cra.gc.ca 21
 For more information

What if you need help? Interpretation bulletins and tax folios

If you need more information after reading this guide, visit IT-110R Gifts and Official Donation Receipts
www.cra.gc.ca/tfsa or call 1-800-959-8281.
T-320R Qualified Investments – Trusts Governed by
Registered Retirement Savings Plans, Registered
Forms and publications Education Savings Plans and Registered Retirement
To get our forms and publications, go to Income Funds
www.cra.gc.ca/forms or call 1-800-959-8281. IT-419R Meaning of Arm’s Length

Electronic mailing lists S5-F1-C1 Determining an Individual’s Residence Status

We can notify you by email when new information on a
subject of interest to you is available on our website. To Pamphlets
subscribe to our electronic mailing lists, go to P148 Resolving your Dispute: Objections and Appeal
www.cra.gc.ca/lists. Rights under the Income Tax Act
RC4059 My Account for Individuals
Tax Information Phone Service (TIPS)
For personal and general tax information by telephone, use Our service complaint process
our automated service, TIPS, by calling 1-800-267-6999.
If you are not satisfied with the service that you have
received, contact the CRA employee you have been dealing
Teletypewriter (TTY) users with or call the telephone number that you were given. If
TTY users can call 1-800-665-0354 for bilingual assistance you are not pleased with the way your concerns are
during regular business hours. addressed, you can ask to discuss the matter with the
employee’s supervisor.
Related forms and publications If the matter is not settled, you can then file a service
complaint by completing Form RC193, Service-Related
Forms Complaint. If you are still not satisfied, you can file a
complaint with the Office of the Taxpayers’ Ombudsman.
RC240 Designation of an Exempt Contribution Tax-Free
Savings Account (TFSA) For more information, go to www.cra.gc.ca/complaints or
see Booklet RC4420, Information on CRA – Service
RC243 Tax-Free Savings Account (TFSA) Return
Complaints.
RC243-SCH-A Schedule A – Excess TFSA Amounts
Tax information videos
RC243-SCH-B Schedule B – Non-Resident Contributions We have a number of tax information videos for
to a Tax-Free Savings Account (TFSA) individuals and small businesses on topics such as
RC343 Worksheet – TFSA contribution room preparing your income tax and benefit return, and
reporting business income and expenses. To watch our
T400A Objection – Income Tax Act videos, go to www.cra.gc.ca/videogallery.

Your opinion counts

If you have comments or suggestions that could help us
improve our publications, send them to:
Taxpayer Services Directorate
Canada Revenue Agency
395 Terminal Avenue
Ottawa ON K1A 0L5

22 www.cra.gc.ca