This article was original published for The Inspired Investor on January 4, 2025
TLDR
- The 2026 TFSA limit remains the same as 2025, the limit is still $7,000
- Canadians 18+ with a Social Insurance Number (SIN) can qualify.
The Tax-Free Savings Account (TFSA) contribution limit will be $7,000 in 2026, matching the 2025 amount. Every year, the Canada Revenue Agency (CRA) declares the annual TFSA contribution limit, which is indexed to inflation and then rounded to the nearest $500. What else should you know? Read on.
Who can open a TFSA?
If you’re a Canadian resident with a Social Insurance Number (SIN) who is at least 18 (or the age of majority in your province of residence) you can qualify to open a TFSA account.
How do I use the limit to calculate my TFSA contribution room?
To calculate the total room in your TFSA available for contributions, you can add this year’s contribution limit to any unused contribution room from previous years, plus any amount withdrawn in the previous year.
Note: generally, your contribution room starts accumulating from the time you turn 18, or in 2009* (when the TFSA was introduced), whichever is later. So, if you open a new TFSA in 2026 and have never contributed to a TFSA elsewhere, you could have total available contribution room of $109,000, up from $102,000. You can find your TFSA contribution room by logging into My Account on the CRA website, although it doesn’t reflect any contributions already made in the current year. It’s important to double check your contribution room each year as CRA charges penalties for over-contributing.
Why is the TFSA limit important?
If you make contributions that exceed your room, you can be taxed 1 per cent per month on that amount. It’s also important to know what counts as a contribution. For example, transferring money between TFSAs in different institutions when done correctly will not affect your contribution room. However, if you withdraw the funds and then contribute them to another TFSA, it qualifies as a new contribution and could result in an over-contribution penalty.
What is the TFSA Contribution Deadline?
You can contribute to your TFSA at any time of year since any unused contribution room carries forward to the next year. Unlike a Registered Retirement Savings Plan (RRSP), there is no tax deduction with a TFSA contribution, so your deposits don’t need to coincide with tax time. However, for the purposes of managing your contributions and withdrawals, and knowing your TFSA limit, Dec. 31 and Jan. 1 are significant dates. Your contribution room is based on the calendar year ending Dec. 31, and your new TFSA limit for the year comes into effect on Jan. 1.
Your TFSA can be a powerful and tax-efficient tool when investing for short-term and long-term goals. Find out more about TFSAs here.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
