Newspapers, bank ads, and even financial websites are often a bit careless when telling people how much they can contribute to their TFSA. They all seem to assume that everyone is 24 or older (in 2015.) What if it’s 2015 and you’re under 24? What if you are 24 or older, but you moved to Canada in 2012 to 2015? What if you left Canada between 2012 and 2015? How much can you contribute to your TFSA if you just turned 18 or if you immigrated to Canada after 2009?
The Age of Majority Is Not the Same Throughout Canada
For younger investors it’s important to clarify one rule about TFSAs. The age of majority varies in different provinces in Canada. Banks and financial institutions will not let you set up a TFSA until you reach the age of majority.
If you are a Canadian Resident, have a SIN number, and you live in
- Alberta
- Manitoba
- Ontario
- Prince Edward Island
- Quebec, or
- Saskatchewan
you can open and contribute to a TFSA once you turn 18 years of age.
If you live in
- British Columbia
- New Brunswick
- Newfoundland and Labrador
- Northwest Territories
- Nova Scotia
- Nunavut, or
- the Yukon
you can’t open and contribute to a TFSA until you turn 19. Your TFSA contribution room starts accumulating once your turn 18 years of age, though. So you will lose one year of tax-sheltered growth of your investments, but otherwise you are not penalized. This is because in these provinces and territories you cannot legally enter into an agreement until you are 19 years of age.
So for people who have been Canadian Residents for each and every year since 2009, this table lets you lookup your TFSA contribution room, if
* you have never made any TFSA contributions before
* you are a Canadian Resident and have been one for each and every year since 2009
* you have a Social Insurance Number, SIN
| Year You Were Born | Year You Make Your First Contribution to your TFSA | Maximum You Can Contribute that Year to Catch Up All Previous Years’ Contribution Room if you live in Alberta Manitoba Ontario Prince Edward Island Quebec Saskatchewan |
Maximum You Can Contribute that Year to Catch Up All Previous Years’ Contribution Room if you live in British Columbia New Brunswick Newfoundland and Labrador Northwest Territories Nova Scotia Nunavut, or the Yukon |
| 1991 or earlier | 2009 | 5 000 | 0 |
| 1991 or earlier | 2010 | 10 000 | 10 000 |
| 1991 or earlier | 2011 | 15 000 | 15 000 |
| 1991 or earlier | 2012 | 20 000 | 20 000 |
| 1991 or earlier | 2013 | 25 500 | 25 500 |
| 1991 or earlier | 2014 | 31 000 | 31 000 |
| 1991 or earlier | 2015 | 36 500 | 36 500 |
| 1992 | 2009 | 0 | 0 |
| 1992 | 2010 | 5000 | 0 |
| 1992 | 2011 | 10 000 | 10 000 |
| 1992 | 2012 | 15 000 | 15 000 |
| 1992 | 2013 | 20 500 | 20 500 |
| 1992 | 2014 | 26 500 | 26 500 |
| 1992 | 2015 | 32 000 | 32 000 |
| 1993 | 2009 | 0 | 0 |
| 1993 | 2010 | 0 | 0 |
| 1993 | 2011 | 5000 | 0 |
| 1993 | 2012 | 10 000 | 10 000 |
| 1993 | 2013 | 15 500 | 15 500 |
| 1993 | 2014 | 21 000 | 21 000 |
| 1993 | 2015 | 26 500 | 26 500 |
| 1994 | 2009 | 0 | 0 |
| 1994 | 2010 | 0 | 0 |
| 1994 | 2011 | 0 | 0 |
| 1994 | 2012 | 5 000 | 0 |
| 1994 | 2013 | 10 500 | 10 500 |
| 1994 | 2014 | 16 000 | 16 000 |
| 1994 | 2015 | 21 500 | 21 500 |
| 1995 | 2009 | 0 | 0 |
| 1995 | 2010 | 0 | 0 |
| 1995 | 2011 | 0 | 0 |
| 1995 | 2012 | 0 | 0 |
| 1995 | 2013 | 5 500 | 0 |
| 1995 | 2014 | 11 000 | 11 000 |
| 1995 | 2015 | 16 500 | 16 500 |
| 1996 | 2009 | 0 | 0 |
| 1996 | 2010 | 0 | 0 |
| 1996 | 2011 | 0 | 0 |
| 1996 | 2012 | 0 | 0 |
| 1996 | 2013 | 0 | 0 |
| 1996 | 2014 | 5 500 | 0 |
| 1996 | 2015 | 11 000 | 11 000 |
| 1997 | 2009 | 0 | 0 |
| 1997 | 2010 | 0 | 0 |
| 1997 | 2011 | 0 | 0 |
| 1997 | 2012 | 0 | 0 |
| 1997 | 2013 | 0 | 0 |
| 1997 | 2014 | 0 | 0 |
| 1997 | 2015 | 5 500 | 0 |
NOTES:
Wait for Your Birthday
According to the Canada Revenue Agency website, you can only contribute to your TFSA on or after your 18 (or 19) birthday. So if your birthday is December 31, 1996, and the age of majority in your province is 18, you must wait till December 31, 2014 to make your first contribution. If the age of majority in your province or territory is 19, you must wait till December 31, 2015. You cannot make the contribution on any date before then.
What If You Contributed Something Already to Your TFSA?
This article is meant for people who have not invested in their TFSA at all yet. You can’t use the numbers in this article to get the information you need.
What If You Contributed Something Already to Your TFSA and Already Took Some Out?
This article is meant for people who have not invested in their TFSA at all yet. You can’t use the numbers in this article to get the information you need.
What If You Were Not a Canadian Resident for Each and Every Year from 2009-the Present?
If you were or are not a Canadian Resident for one or more years between 2009 and the present, you must not include the maximum TFSA contribution limit for that year or those years in your calculation of how much you can contribute.
For example, if you were 25 in 2009 and opened a TFSA and contributed the maximum of $5000, and then for 2010, 2011 and 2012, you were not a Canadian Resident, and in 2013 you became a Canadian Resident again, you can only contribute an additional $5500 to your TFSA in 2013. You cannot contribute the ($5000+5000+5000 =) $15,000 for the years that you were non-Resident. When you are non-Resident you do not earn contribution room and you do not get it back later.
Things Are a Bit More Complicated for People Becoming Canadian Residents or Leaving Canada Permanently
Tax laws would be simpler to understand if no one ever moved. In reality people immigrate to and emigrate from Canada every year. Here’s some information for new immigrants to Canada.
I Am a New Immigrant to Canada; As a New Canadian Resident What Is My TFSA Limit?
Only Canadian Residents earn an annual TFSA contribution amount. Each year, a Canadian Resident earns a bit more TFSA contribution room.
If you were not a Canadian Resident in a given year, even if you were 18 or older, you have not earned any TFSA room for that year.
So if a person who was born in 1991 or earlier moves to Canada and becomes a Canadian Resident
- In 2009, he or she has the same limits as someone born in 1991 or earlier in Canada
- In 2010, has the same limits as someone born in 1992 living in Alberta
- In 2011, has the same limits as someone born in 1993 living in Alberta
- In 2012, has the same limits as someone born in 1994 living in Alberta
- In 2013, has the same limits as someone born in 1995 living in Alberta
- In 2014, has the same limits as someone born in 1996 living in Alberta
- In 2015, has the same limits as someone born in 1997 living in Alberta
According to the CRA website you earn TFSA contribution room in one-year chunks. Even if you arrive in Canada part way through a year, you will earn the room for the entire year, not just part of it. For example, if you became a Canadian resident in November 2013, you will still have $5500 in contribution room for 2013.
What If I am a Grad Student with a Temporary (R prefix) Social Insurance Number
Not everyone living in Canada is a Permanent Resident. Some are students attending university. Those students may be working and paying taxes. They will have a SIN that starts with the letter R.
According to The Canada Visa website some students are considered Residents of Canada although they are not Permanent Residents. They are eligible to open a TFSA. The CRA definitions for a Canadian Resident are online.
If a person needs further clarification on whether they are a Resident, more information is available. The CRA website says “For more information, see Interpretation Bulletin IT-221R, Determination of an individual’s Residence Status, or contact the international Tax Services Office at 1-855-284-5942. If you are calling from outside Canada and the United States, call 613-940-8495.”
What Is My TFSA Limit If I Was a Canadian Resident but Left, then Returned and Became a Resident Again?
If you leave Canada and are no longer a Canadian Resident (and the Canada Revenue Agency agrees you are no longer a resident) you do not have to cash out your TFSA. You cannot make any new contributions however.
According to Canadian Tax Resource, while non-Resident, a person will *not* get any new contribution room. Even if they move back and become a resident again later, they will not get back those lost years of contribution room.
Be aware, also, that if you make a withdrawal from your Canadian TFSA while a Resident of a country other than Canada, that other country may consider the money to be income taxable by that country.
According to the CRA website, if you make a withdrawal from your TFSA while a non-Resident of Canada the following year you will be given the room to re-contribute that withdrawal, but you can only put the money back in after you re-establish Canadian Resident status, not before.
If you plan to move out of Canada and take up residence elsewhere, I strongly suggest you plan how to handle your TFSA with a Canadian tax specialist who fully understands the rules both in Canada and in the country to which you are moving!
How Much Can Old Timer Canadians Contribute to our TFSAs?
If you turned 18 in 2009 or before, and if you have always been a Canadian, and if you have never made any contribution to a TFSA, and if the current year is 2013, you can contribute $25,500.
If you turned 18 in 2009 or before, and if you have always been a Canadian, and if you have never made any contribution to a TFSA, and if the current year is 2014, you can contribute $31,000.
If you turned 18 in 2009 or before, and if you have always been a Canadian, and if you have never made any contribution to a TFSA, and if the current year is 2015, you can contribute $36,500.
If You’re Still Unsure Contact the Canada Revenue Agency
The fines for over-contributing to your TFSA are high. If you’re still not sure what you can contribute, I’d strongly recommend you contact the CRA to discuss your personal limit.
Related Reading
- Are You Considered a non-Resident of Canada? Check the CRA website for details at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/lgbl-eng.html
- Maximize your TFSA First
- How to Choose a Self-Directed TFSA Brokerage Account to Minimize Fees and Costs
- How to Choose a Standard Bank Tax Free Savings Account, TFSA, with Minimal or No Fees
Join In
Have I just made matters worse? Do you understand what your TFSA contribution limit is and what it’s based on? Please share your views with a comment.