What happens if I contribute more than my contribution room to my Tax Free Savings Account (TFSA)?

The Canada Revenue Agency (CRA) imposes a tax of 1% per month, for each month or partial month that the excess contribution remains in the account.

The 1% tax will continue to apply until one of the following:

  • The entire excess amount is withdrawn; or
  • For eligible individuals, the entire excess amount is absorbed by additions to their unused TFSA contribution room in the following years.

For more information, please check the CRA websiteCRA website.

Last updated July 2, 2020