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- The entire excess amount is withdrawn; or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.