This is a question clients frequently ask me so I thought I should write a blog post about it.
Assuming you have made your maximum allowable contribution for that tax year, the answer is “no”.
In any tax year, your total contributions to your Tax-Free Saving Account (“TFSA”) cannot exceed your contribution room. If you withdraw funds from your TFSA, then that amount gets added to your contribution room for the next year. So, for example, If you made the maximum contributions to your TFSA in 2021, and you later withdrew $5,000.00 that same year, then your contribution room for 2022 would increase by $5,000.00. If you recontributed the $5000.00 in 2021, then CRA will treat the $5,000.00 as a excess contribution and you will incur a penalty of 1% per month for each month that the excess contribution remains in your TFSA.
You accumulate TFSA contribution room for each year even if you do not file an income tax and benefit return or open a TFSA. You can carry forward any unused contribution room from previous years indefinitely.
To find out the annual TFSA contribution limits for the tax years 2009 to 2021 click below.
Click here to find out your TFSA contribution limits
You can find out your own contribution room available by using the CRA “My Account” portal.
Click the “Subscribe” button at the top of the page for more tips.