TFSA Contribution Limit 2026 and Your Cumulative Room

TFSA limit 2026: the annual dollar limit

The 2026 TFSA dollar limit is $7,000. The new limit is added to your room on January 1; it is indexed to inflation and rounded to the nearest $500, which is why it stays the same for several years and then jumps. You can contribute up to your available room at any time during the calendar year, through the financial institution that holds the TFSA.

The limit is shared across all your TFSAs. Opening a second account at another bank does not give you a second limit; the CRA’s own example shows Isla, an 18-year-old who in 2024 put the full ${c(7000)} limit into two different TFSAs and over-contributed by ${c(7000)}.

Cumulative TFSA room: how much can you put in your TFSA?

Your room starts accumulating in the year you turn 18, provided you are a resident of Canada, and unused room carries forward indefinitely. Adding up every year’s limit from 2009 to 2026 gives $109,000 for someone who has been eligible since the start and never contributed. Someone who turned 18 in 2019 has $51,500.

The CRA’s formula for this year’s available room is: this year’s dollar limit, plus unused room from previous years, plus any withdrawals made last year, minus contributions already made this year. Investment growth does not reduce room, and investment losses do not restore it.

Withdrawals and re-contributions

Withdrawals are tax-free, and the amount withdrawn is added back to your room on January 1 of the following year, not immediately. Re-contributing in the same year is the most common way people over-contribute.

The CRA’s example: Taylor starts 2026 with $7,000 of room, contributes $4,000 (room left $3,000), later withdraws $4,000, and re-contributes $3,500 on October 2. The withdrawal does not create room until January 1, 2027, so she has over-contributed by $500.

To move money between TFSAs, ask the receiving institution for a direct transfer. Withdrawing and re-depositing yourself counts as a withdrawal and a new contribution.

How to calculate your own TFSA room

The CRA recommends working out your room from your own records with its four-line formula. Example: Alex contributed the full limit every year to the end of 2024, so started 2025 with $7,000 of room. Alex put in $1,000 in June and took out $4,000 in October, ending 2025 with $6,000 unused. On January 1, 2026 the room is $6,000 unused + $4,000 withdrawn in 2025 + the $7,000 2026 limit = $17,000.

• Start with the 2026 dollar limit: $7,000.
• Add your unused room at the end of last year.
• Add everything you withdrew last year (except direct transfers between your own TFSAs).
• Subtract every contribution made so far this year, at every institution.

TFSA over-contribution penalty

Any excess amount is taxed at 1% per month for as long as it stays in the account. A $3,000 excess left in for 5 months costs $150. The CRA says to withdraw the excess as soon as possible rather than wait for a letter, because issuers only report a year’s transactions by the end of February of the following year and the CRA processes those records in the spring, months after the excess began.

You must also file a TFSA Return (Form RC243) by June 30 of the year after the year the tax applies. If the excess was a reasonable error and you removed it promptly, you can ask the CRA in writing to waive or cancel the tax; the CRA warns that a deliberate over-contribution may have additional tax consequences.

Why your CRA account can show the wrong TFSA room

The TFSA room in your CRA account is updated once a year, in the spring, after issuers report the previous year’s transactions. On January 1, 2026 it does not yet reflect what you did in 2025. In the CRA’s example, Moira contributed $13,500 in July 2024; on January 1, 2025 her account still showed $20,500 of room, so her $11,000 contribution in February 2025 created a $4,000 excess. Keep your own record of every contribution and withdrawal across all institutions, and use the CRA figure only as a cross-check after spring.

Newcomers, non-residents and death

New residents earn room only from the year they become resident, not back to 2009. The CRA describes a newcomer who arrived in 2024, deposited $95,000 believing he had all the room since 2009, and created an $88,000 excess taxable at 1% a month. If you become a non-resident you keep accumulated room and can withdraw, but any contribution made while non-resident is taxable.

When a TFSA holder dies, the value at death is not taxed, but income earned after death is taxable to the beneficiaries. A spouse named as successor holder takes over the account. A spouse who receives the money as a beneficiary can put it into their own TFSA as an exempt contribution, without using their own room, by December 31 of the year after the death, filing Form RC240 within 30 days of the contribution.