Tax Free Savings Account
Notice to the reader
This measure has received Royal Assent.
Changes to the Tax-Free Savings Account (TFSA) were announced in December 2015.
1. What is a Tax-Free Savings Account (TFSA)?
A TFSA is a registered savings account that allows taxpayers to earn investment income tax-free inside the account. Contributions to the account are not deductible for tax purposes, and withdrawals of contributions and earnings from the account are not taxable.
2. What changes does Budget 2015 introduce for the TFSA annual contribution limit?
For the 2015 and subsequent calendar years, the budget introduces an increase to the TFSA annual contribution limit from $5,500 to $10,000. In addition, the TFSA annual contribution limit will no longer be indexed to inflation.
3. Did the Canada Revenue Agency (CRA) permit individuals to take advantage of the increase to the TFSA annual contribution limit before the law was enacted?
Yes. Consistent with its standard practice, the CRA administered this measure on the basis of the Budget announcement.
4. Where can I get more information on the change?
The CRA is committed to providing taxpayers with up-to-date information. The CRA encourages taxpayers to check its Web pages often. All new forms, policies, and guidelines will be posted as they become available.
In the meantime, please consult the Department of Finance Canada's Budget 2015 documents for details.
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