Tax-Free Savings Account (TFSA) Guide for Issuers

RC4477(E) Rev. 23

The CRA's publications and personalized correspondence are available in braille, large print, e-text, or MP3. For more information go to About multiple formats or call 1-800-959-5525.

La version française de ce guide est intitulée Compte d’épargne libre d’impôt (CELI) Guide pour les émetteurs.

Unless otherwise stated, all legislative references are to the Income Tax Act or, where appropriate, the Income Tax Regulations.

Table of contents

• Definitions
• Part I – Instructions related to filing the TFSA annual information return
• Chapter 1 – The TFSA annual information return
  • How to fill out a TFSA individual record
  • How to fill out a TFSA return summary
  • How to produce an annual statement of information in the case of transfer between specimen plans or a change to a TFSA contract number
• Chapter 2 – Electronic filing methods
  • What you need to file
  • Filing by Internet file transfer (XML)
  • Filing by Web Forms
  • Filing without a Web access code
  • What could cause a return or an individual record to be rejected
• Chapter 3 – After you file
  • Retrieving rejected individual records
  • Amending, cancelling, or adding individual records
  • How to resubmit individual records that were rejected
• Chapter 4 – Penalties and interest
  • Due date
  • Late filing and failure to file the TFSA annual information return
  • Failure to provide information on a return
  • Interest on penalties
  • Notice of assessment
• Part II – General TFSA information
• Chapter 1 – Death of a TFSA holder
  • Deposit or annuity contract TFSA
  • Trust governed by a TFSA
  • Designated beneficiaries
• Chapter 2 – Tax payable on non-qualified investments
• Chapter 3 – Tax on an advantage
• Chapter 4 – Tax payable on prohibited investments
• Chapter 5 – Taxes on excess and non-resident contributions
• Appendix A – Data elements – TFSA individual electronic record
• Appendix B – Data elements – TFSA return summary
• Related forms and publications
  • Forms
  • Guides
  • Income tax folios
  • Information circulars
• Digital services
  • Handling your business taxes online
  • Receive your CRA mail online 
  • Create a pre-authorized debit agreement from your Canadian chequing account
  • My Payment
• For more information
  • If you need help
  • Forms and publications
  • Direct deposit
  • Electronic mailing lists
  • Tax Information Phone Service (TIPS)
  • Teletypewriter (TTY) users
  • Formal disputes (objections and appeals)
  • CRA Service Feedback Program
    • Service complaints
    • Reprisal complaints
  • Due dates
  • Cancel or waive penalties and interest

Find out if this guide is for you

This guide is intended for use by issuers of the tax-free savings account (TFSA) and is divided into two parts.

Part I contains information on how to file the TFSA annual information return by Internet. The return includes the TFSA individual record and the TFSA return summary. You will also find details on failure to file a return and interest and penalties that may be applied.

Part II contains general TFSA information, such as general legislative information and the rules for beneficiaries of deceased TFSA holders. It also provides information on when to file a T4A or NR4 slip. We also explain tax implications when the TFSA holds a non qualified investment, when an advantage is extended, when there are excess contributions and when a non resident holder makes contributions.

This guide does not deal with every reporting situation.

We use plain language to explain the most common reporting situations. If you need more information after reading this guide, call 1-800-959-5525.

We have included definitions of some of the terms used in this guide in the Definitions section. You may want to read this section before you start.

For more information on how to file your TFSA annual information return electronically, go to Filing Information Returns Electronically.

Definitions

Advantage – any benefit or debt that is conditional on the existence of the TFSA, subject to certain exceptions for normal investment activities and conventional incentive programs.

An advantage also includes any benefit that is an increase in the total fair market value (FMV) of the property of the TFSA that is reasonably attributable to any one of the following:

• a transaction or an event (or series) that would not have occurred in a normal commercial or investment context between arm’s length parties acting prudently, knowledgeably, and willingly, and one of the main purposes of which is to benefit from the tax-exempt status of the TFSA
• a payment received in substitution for a payment for services rendered by the holder (or non-arm's length person) or for a return on investment on non-registered property
• a swap transaction
• specified non-qualified investment income that has not been paid from the TFSA within 90 days of the holder receiving a notice from CRA requiring removal

An advantage also includes any benefit that is income or a capital gain that is reasonably attributable to one of the following:

• a prohibited investment
• a deliberate over-contribution to a TFSA

For more information on advantages, go to Income Tax Folio S3-F10-C3, Advantages – RRSPs, RESPs, RRIFs, RDSPs, and TFSAs.

Arm’s length – refers to a relationship or a transaction between unrelated persons who act in their separate interests. An arm’s length transaction is generally a transaction that reflects ordinary commercial dealings between parties acting in their separate interests. 

Common‑law partner – a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. The person:

• has been living with you in a conjugal relationship and this current relationship has lasted for at least 12 continuous months
  Note
  In this definition, “12 continuous months” includes any period that you were separated for less than 90 days because of a breakdown in the relationship.

• is the parent of your child by birth or adoption
• has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support

Fair market value (FMV) – is generally considered to mean the highest price expressed in terms of money that can be obtained in an open and unrestricted market between informed and prudent parties, who are dealing at arm’s length and under no compulsion to buy or sell.

For information on the valuation of securities of closely-held corporations, go to Information Circular IC89-3, Policy Statement on Business Equity Valuations.

Holder – the individual who entered into the TFSA arrangement and, after the death of the holder, the individual’s spouse or common-law partner (the survivor) if designated as the successor holder of the TFSA. The surviving spouse or common-law partner can designate their own survivor as their successor holder.

Issuer – a trust company, a licensed annuities provider, a person who is or is eligible to become a member of the Canadian Payments Association, or a credit union with which an individual has a qualifying arrangement.

Non‑arm’s length – generally refers to a relationship or transaction between persons who are related to each other.

However, a non-arm’s length relationship might also exist between unrelated individuals, partnerships or corporations, depending on the circumstances. For more information, see the definition of “Arm’s length.” 

Non‑qualified investment – any property that is not a qualified investment for the trust. For more information, go to Income Tax Folio S3‑F10‑C1, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

Prohibited investment – this is property to which the TFSA holder is closely connected. It includes any of the following:

• a debt of the holder
• a debt or share of, or an interest in, a corporation, trust or partnership in which the holder has a significant interest (generally a 10% or greater interest, taking into account non-arm's length holdings)
• a debt or share of, or an interest in, a corporation, trust or partnership with which the holder does not deal at arm’s length

A prohibited investment does not include a mortgage loan that is insured by the Canada Mortgage and Housing Corporation or by an approved private insurer. It also does not include certain investment funds and certain widely held investments which reflect a low risk of self‑dealing. For more information, go to Income Tax Folio S3‑F10‑C2, Prohibited Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

Qualified donee – the Income Tax Act (ITA) permits qualified donees to issue tax receipts for donations they receive from individuals or corporations. Some examples of qualified donees are registered charities, Canadian municipalities, registered Canadian amateur athletic associations, the United Nations or one of their agencies, or universities outside Canada that accept Canadian students.

Qualified investment – an investment in properties (except real property), including money, guaranteed investment certificates, government and corporate bonds, mutual funds, and securities listed on a designated stock exchange. The types of investments that qualify for TFSAs are generally similar to those that qualify for registered retirement savings plans. For more information, go to Income Tax Folio S3‑F10‑C1, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

Qualifying transfer – a direct transfer between a holder’s TFSAs, or a direct transfer between a holder’s TFSA and the TFSA of their current or former spouse or common‑law partner if the transfer relates to payments under a decree, order, or judgment of a court, or under a written agreement relating to a division of property in settlement of rights arising from the breakdown of their relationship and they are living separate and apart at the time of the transfer.

Related persons – are not considered to deal with each other at arm's length. Related persons include individuals connected by blood relationship, marriage, common-law partnership, or adoption (legal or in fact). A corporation and another person or two corporations may also be related persons.

Specified non‑qualified investment income – any income (excluding the dividend gross‑up), or a capital gain that is reasonably attributable, directly or indirectly, to an amount that is taxable for any TFSA of the holder (for example, subsequent generation income earned on non‑qualified investment income or on income from a business carried on by a TFSA).

Spouse – a person to whom the holder is legally married.

Successor holder – in provinces or territories that permit a TFSA beneficiary designation, a successor holder is a spouse or common‑law partner of the holder at the time of death, named by the deceased as the successor holder of the TFSA, who acquires all of the rights of the holder under the arrangement including the right to revoke any beneficiary designation. This spouse or common‑law partner becomes the new account holder.

Survivor – an individual who is, immediately before the TFSA holder’s death, a spouse or common‑law partner of the holder.

Swap transaction – this is any transfer of property between the TFSA and its holder (or non-arm's length person). Exceptions are provided for contributions to and distributions from the TFSA, purchase and sale transactions between the TFSA and another TFSA of the holder, and transactions relating to insured mortgages. For more information on swap transactions and applicable transitional rules, go to Income Tax Folio S3-F10-C3, Advantages – RRSPs, RESPs, RRIFs, RDSPs, and TFSAs.

Unrelated persons – may not be dealing with each other at arm's length at a particular time. Each case will depend upon its own facts. The following criteria will be used to determine if the parties to a transaction are not dealing at arm's length:

• whether there is a common mind that directs the bargaining for the parties to a transaction
• whether the parties to a transaction act in concert without separate interests; ("acting in concert" means, for example, that parties act with considerable interdependence on a transaction of common interest)
• whether there is de facto control of one party by the other because of, for example, advantage, authority, or influence

For more information, go to Income Tax Folio S1-F5-C1, Related Persons and Dealing at Arm's Length.

Part I – Instructions related to filing the TFSA annual information return

Chapter 1 – The TFSA annual information return

Throughout this guide we use the term “TFSA individual record.” A TFSA individual record is similar to a slip except that TFSA issuers are not required to send their client a slip (for example, T4, T5). Therefore, when we refer to TFSA individual records, we are referring to what the issuers must submit to us.

You may have to send a T4A slip or NR4 slip. For more information, go to Chapter 1 – Death of a TFSA holder. You may also have to send notification of non-qualified investment to the holder. For more information, go to Chapter 2 – Tax payable on non-qualified investments.

A TFSA annual information return consists of both the TFSA individual records and the TFSA return summary. You have to fill out a return for each TFSAs exists at any time in the year. Once a TFSA is opened, an individual record must be filed, regardless of activity in the account. The information (data elements) required in order for us to process each of these forms is described in Appendix A and Appendix B respectively.

Do not prepare a TFSA individual record if the TFSA was reported as closed in the previous year’s TFSA annual information return. We do not consider a TFSA to have been closed just because there are no funds in the account or there has been no activity during the reporting year, or both.

How to fill out a TFSA individual record

The TFSA individual record is used to report the information as listed in "Appendix A – Data elements – TFSA individual electronic record".

How to fill out a TFSA return summary

The TFSA return summary is used to report the totals of the amounts you reported on all the related TFSA individual records under the TFSA identification number. The totals have to agree with the amounts you reported in the TFSA individual records. Any discrepancies will cause the TFSA annual information return to be rejected.

Before completing the TFSA return summary, see "Appendix B – Data elements – TFSA return summary".

For more information, see Filing by Internet file transfer (XML).

How to produce an annual statement of information in the case of transfer between specimen plans or a change into a TFSA contract number

In situations where qualifying arrangements are transferred between specimen plans, there is no prescribed transfer form that you must fill out; however, both the transferring and receiving institutions should keep an internal record of the transfers.

Transfers

When arrangements are transferred from one specimen plan to another – whether or not there is a change in issuer – each account that was transferred “out” must be reported on the TFSA annual information return of the transferring specimen as a “TFSA account closed this year” with the “closing date,” provided all amounts have been transferred “out.” Similarly, each account that was transferred “in” must be reported on the TFSA annual information return of the receiving specimen as a “new TFSA account this year for this holder” if this is the first year filing for this contract for this holder. Any amounts transferred, as a result of the transfer of arrangements from one specimen to another, must not be reported as contributions or withdrawals on the TFSA annual information return. The transferred “in” amounts will be reflected in the year end FMV of the receiving specimen.

Change to a TFSA contract number

A TFSA contract consists of the combination of both the contract number and the TFSA ID number. If either number or both are changed, it represents a change to a holder’s contract. The issuer must report the old contract on the TFSA annual information return as a “TFSA account closed this year” with the “closing date” and report the new contract as a “new TFSA account this year for this holder.”

A TFSA with a new TFSA ID number, a new contract number, or both is considered a new contract with a presumed opening date of January 1 of the year of the election.

The original contract will have an accumulated FMV up to the year-end preceding the transfer. This accumulated FMV will be reflected in the year end FMV of the new contract.

If you have questions after reading this information, please refer to Contact the Registered Plans Directorate.

Chapter 2 – Electronic filing methods

You can only file a TFSA annual information return by Internet using one of the four options mentioned below. We do not accept returns filed on CDs, DVDs, USB keys, diskettes or paper. You can file a TFSA annual information return by using:

• Internet file transfer (XML)
• My Business Account (for business owners)
• Represent a Client (for authorized representatives of TFSA issuers)
• Web Forms (up to 100 records)

If filing by Internet file transfer, the return must be in the mandatory Extensible Markup Language (XML) format and conform to our technical specifications (including the T619, Electronic Transmittal record), which can be found at Filing Information Returns Electronically (T4/T5 and other types of returns) under “XML specifications”. Use a validating parser before submitting the XML file to ensure it conforms to our schema. It can significantly assist in reducing the number of individual records that may be rejected.

For more information, go to Digital services for businesses.

You will receive immediate confirmation that we received your TFSA annual information return regardless of which method you use.

Internet filing will be available starting January 8, 2024.

Before you (the TFSA issuer) use any of the filing methods, you must have a valid TFSA RZ program account number.

The RZ program account number consists of three parts:

• the business number (BN)
• a two-letter program identifier (RZ)
• a four-digit reference number

The entire account number has 15 characters. If you already have a BN, you only need to add the TFSA RZ program account number to your existing BN.

You can obtain a TFSA RZ program account by registering online through the Business Registration Online (BRO) or by filling out Form RC1, Request for a Business Number and Certain Program Accounts.

If a TFSA annual information return is filed with an invalid RZ program account number or if the RZ program account number does not match the information in our database, it will be rejected.

What you need to file

Business number (BN)

If you do not have a BN, you must first apply for a business number online through Business Registration Online (BRO), or fill out Form RC1, Request for a Business Number and Certain Program Accounts, and submit it to us. You can submit a request by phone, or you can send the applications by fax or mail. For a list of addresses and fax numbers where the form can be sent, or to register for a BN online, go to Business Number. To register by phone, call 1-800-959-5525.

Web access code

To file your return over the Internet using the Internet file transfer or Web Forms service, you will need business number and its associated web access code (WAC), unless you are filing through My Business Account or Represent a Client. For more information about these services, go to the next section Filing without a web access code.

If you have misplaced or do not have a WAC, go to Filing Information Returns Electronically (T4/T5 and other types of returns) to access our web access code online service.

For more information, or to obtain your web access code, visit Online Web access code.

If you cannot get your WAC online or would like to change it, call the E-Services Helpdesk at 1-800-959-5525.

Filing by Internet file transfer (XML)

Internet file transfer allows you to transmit an original or amended TFSA annual information return with a maximum file size of 150 megabytes (MB). All you need is a Web browser to connect to the Internet, and your software will create, print, and save your electronic information return in XML format. For more information about this filing method, go to Filing Information Returns Electronically (T4/T5 and other types of returns).

If you use commercial or in-house developed software to manage your business, you can file up to 150 MB by Internet file transfer. For example, a service bureau can file multiple returns in one submission, provided the total submission does not exceed the 150 MB restriction.

If your file is more than 150 MB, you can still file using the Internet file transfer application by either:

• compressing the file
• separating the file into two or more files (the TFSA return summaries must reflect the same split)

Regardless of the method used, each submission cannot exceed 150 MB and a compressed file can only contain one XML file per submission .

An RZ program account number is not needed to use the Internet file transfer service, but the TFSA return you transmit must contain the TFSA issuer’s RZ program account number. For example, if you are a third party service provider, you do not need your own RZ program account number.

When using Internet file transfer, the information is automatically encrypted before it is submitted to us.

Multiple TFSA returns can be filed in one submission using the Internet file transfer application provided that the total submission does not exceed the 150 MB restriction.

Service providers must use their own BN and WAC – not the WAC of each TFSA issuer in the submission. For more information, go to Digital services.

Filing by Web Forms

Our Web Forms application is free and secure. To use it, all you need is access to the Internet. With Web Forms you can fill out an information return easily, following the step-by-step instructions.

Web Forms lets you:

• file up to 100 TFSA records (original, additional, amended, or cancelled) from our website
• calculate all the totals for the summary
• create an electronic information return containing TFSA records, which can be saved and imported later
• print all records
• validate data in real time

After you submit your information return, you will receive a confirmation number that will be your proof that we received it.

To use the Web Forms application, you must have a web access code. If you do not have a web access code, you can easily get one online or by calling us. 

To start using this application or to get more information about Web Forms, go to Filing Information Returns Electronically (T4/T5 and other types of returns).

Filing without a web access code

To register as a business owner, go to My Business Account and do the following:

• select “CRA Register” and create a CRA user ID and password. You can also select “Continue to Sign-In Partner” and use the same sign-in information you use for other online services, (such as online banking).
• to register, you will need to provide all the following information:
  • your social insurance number (SIN)
  • your date of birth
  • your postal code or ZIP code
  • an amount you entered on your Income tax and benefit return (the line we ask for will vary; it could be from the current or the previous tax year)
  • your business number (BN)
• you must enter a CRA security code to finalize the registration process. You can ask for the CRA security code by mail or email.
• return to My Business Account, to enter your CRA security code.

To register as a representative, including employees of a business, go to Represent a Client and do the following:

• select “CRA Register” and create a CRA user ID and password. You can also select “Continue to Sign-In Partner” and use the same sign-in information you use for other online services, such as online banking.
• to register, you will need to provide:
  • your access code from your notice of assessment
  • your postal code or ZIP code
• register as the business owner (using your BN) or as yourself and receive a representative identifier (RepID), or create a group of representatives and receive a group identifier (GroupID)
• get authorization to have online access to the TFSA account by doing one of the following:
  • using the “Authorization request” service with Represent a Client
  • giving your BN, RepID, or GroupID to businesses 
  • getting your employer permission so they can authorize you using the “Authorize or manage representatives” service in My Business Account

Note
If the business authorizes you online in My Business Account, you will have immediate online access to the business accounts.

Once you are registered as the business owner, or registered and authorized as a representative, an employee, or a group of employees, you will be able to file or amend TFSA slips without a Web access code.

If there are rejected TFSA individual records, we will inform you by email.

What could cause a return or an individual record to be rejected

Any information that does not conform to our schema, including negative amounts, will cause the TFSA annual information return or the individual record to be rejected.

The dates must be provided in YYYY-MM-DD format. Inversions in the month and day may cause a reject if the month field is greater than 12.

If a field is left blank, it will cause a reject, except if the field indicates “if applicable,” such as the FMV at death if the holder is not deceased.

We strongly recommend that you use a validating parser before submitting the XML documents to ensure they conform to our schema.

For more information, go to Retrieving rejected individual records.

Chapter 3 – After you file

In this chapter, we explain how you can retrieve rejected TFSA individual records. We also explain how to amend, cancel, or add a TFSA individual record after you file as well as how to resubmit individual records that were previously rejected.

When we receive your TFSA annual information return, our system performs validation checks to confirm that the data was submitted correctly and issues you a submission number. The submission number is your confirmation that we received your TFSA annual information return. The file name, date, and time of receipt are indicated on the confirmation of receipt page.

If there are any problems with the processing of your return, we will contact you.

Retrieving rejected individual records

The downloadable file of rejected records will be available in both My Business Account and Represent a Client. We will only notify you of any rejected individual records by email. Make sure to provide us with a valid email address of the contact person for your TFSA RZ program account.

You can download rejected records using the “Download rejected TFSA individual records” service at:

• My Business Account, if you are the business owner
• Represent a Client, if you are an authorized employee or representative

Amending, cancelling, or adding individual records

Amending individual records

After filing your TFSA annual information return, you may notice an error on a TFSA individual record. If so, you will have to prepare an amended individual record to correct the information. When submitting an amended individual record, send the entire record and not just the portion that needs amending.

Amended records are shown in an XML file with report type code “A.”

The three possible report type codes are as follows:

• O = Original
• A = Amendment
• C = Cancelled

An amended return can contain amended or cancelled records, but it cannot contain original records.

Do not send an amended record if you are modifying a contract number. For more information, see Cancelling individual records.

The summary and Form T619, Electronic Transmittal record, must show report type code “A,” not “O.”

The file must be in XML format.

For more information on how to amend records electronically, go to Filing Information Returns Electronically (T4/T5 and other types of returns) and select “How to Amend”.

To file amended individual records electronically, see Chapter 2 – Electronic filing methods. 

Cancelling individual records

After filing your TFSA annual information return, you may need to fully remove an individual record. If so, you will have to submit a cancelled individual record for that contract number to remove the information for that year. When submitting a cancelled record, the XML file must show it is a report type code “C,” and must be identical to the most current record (original or amendment).

Use report type code “C” for the following scenarios:

• You need to correct a contract or TFSA identification number previously submitted in error.
• A record was filed that we cannot accept as valid. A cancelled record should be filed to acknowledge that this contract is not a TFSA.
• The wrong year was established as the election year (there can only be one election year established for a particular contract). For example, a record was filed and accepted as the election year for 2023; however, the contract was actually opened in 2022.
• The election was established under the wrong social insurance number (SIN) or temporary tax number (TTN) and there is an accepted record(s) for years subsequent to the election year under the same SIN or TTN. For example, an original record was accepted, and the election was established in 2021 under the wrong SIN or TTN; subsequent year records for 2022 and 2023 have also been filed and accepted under the same number. In order to correct this situation, cancelled records would be required to be submitted for the 2022 and 2023 reporting years. Once accepted, an amended record for 2021 should be filed reporting the correct holder’s SIN or TTN.
• Once the 2021 amended record is accepted and the election is established under the correct SIN or TTN, new original records should be submitted for the 2022 and 2023 reporting years.
• After discussing with the TFSA Processing Unit, it was determined that a cancelled record is required.

A cancelled record applies to a particular reporting year. When we receive a cancelled record for a particular year, we will eliminate the contributions and withdrawals for that particular year and recalculate the contribution room and taxes for that year.

To cancel records for the same contract for more than one year, you have to submit the cancelled record for the last year first. Once we have accepted that cancelled individual record, submit the cancelled individual record for the next affected year. This process will help to avoid further rejections of records to financial institutions or referrals to the TFSA Processing Unit.

Never use report type code “C” when:

• an amended record can correct the mistake in the previous record.
• you want to cancel previously submitted and valid records in order to refile them with other records that were not previously submitted. The records that were not previously submitted should be sent in a separate file.

Use an amended record for any other data element you want to modify.

Adding individual records

After you file your TFSA annual information return, you may discover that you need to send us additional TFSA records. If you have original records that were not filed with your information return, file them in a separate original return. Do not combine the new records with previously submitted ones.

To file additional individual records electronically, go to Chapter 2 – Electronic filing methods.

For common types of errors, go to Table 1 – Error on individual records, and Table 2 – Large scale errors affecting a large number of accounts.

How to resubmit individual records that were rejected

After you file, you will be notified by email if a TFSA individual record has been rejected, and that a downloadable file is available either in My Business Account or in Represent a Client. If this is the case, you must correct the data and resubmit the individual record as an amended record. We will store the original record and match the amended record with the information on file.

Failure to resubmit an amended record in the case of a TFSA opened during the reporting year may result in the account not being registered as a TFSA and the client being subject to tax on the investment earnings. Failure to resubmit an amended record, whether or not the TFSA was opened in the reporting year, can also affect the calculation and notification of an individual’s TFSA contribution room.

For a complete list of all error codes and descriptive records, go to Error codes and descriptive messages for TFSA rejected individual records.

Chapter 4 – Penalties and interest

In this chapter, we explain the various penalties that may be applied on a TFSA annual information return.

A TFSA annual information return consists of TFSA individual records and the related TFSA return summary. A summary alone is not a TFSA annual information return. You have to fill out a TFSA annual information return if you prepare one or more TFSA individual records.

Due date

You have to file the TFSA annual information return by the last day of February following the calendar year to which the TFSA annual information return applies. If the last day of February is a Saturday or Sunday, your TFSA annual information return is due the next business day.

If you discontinue your business or activity, you have to file a return for the year or part-year no later than 30 days after the date the business or activity ended.

Late filing and failure to file the TFSA annual information return

The minimum penalty for late filing the TFSA annual information return is $100 and the maximum penalty is $7,500.

Failure to provide information on a return

Anyone who prepares a TFSA annual information return has to make a reasonable effort to get the necessary information, including the SIN or TTN and date of birth of the individual. If you fail to comply with this requirement, you may have to pay a $100 penalty for each offence.

Make sure that the SIN or TTN you enter on each TFSA individual record matches the TFSA holder’s SIN or valid TTN. You must also make sure that the name and date of birth match the information in our records.

If you have to prepare a TFSA annual information return, or if you are an officer, employee, or agent of someone who does, do not share a person's SIN or TTN, unless the law requires or allows you to do so, or you need it for the reason it was given to you.

If you use an individual’s SIN/TTN for unauthorized purposes, you may be guilty of an offence and liable, if convicted, to a maximum fine of $5,000 or imprisonment of up to 12 months, or both.

Interest on penalties

We charge interest, compounded daily at a prescribed rate, on the total amount of penalties and interest outstanding. Interest and penalties are payable to the Receiver General for Canada.

Notice of assessment

We will issue a notice of assessment for the TFSA annual information return only if we apply a penalty.

Part II – General TFSA information

In this part of the guide, we explain various general legislative rules, such as what to do when a TFSA holder dies or when the TFSA holder is a non-resident. We also explain tax implications on certain investments and what requirements you, as the issuer, have and how to report and file these amounts.

Chapter 1 – Death of a TFSA holder

In this chapter, we explain the reporting requirements that apply when the last holder dies and, as a result, the arrangement ceases to be a TFSA.

This information does not apply if the holder named their spouse or common-law partner as the successor holder of the TFSA. If this is the case, the arrangement maintains its tax-exempt status as a TFSA.

The tax treatment and reporting requirements depend on whether the TFSA is a deposit, an annuity contract, or a trust.

Deposit or annuity contract TFSA

When the last holder of a deposit or an annuity contract TFSA dies, the arrangement ceases to be a TFSA. The FMV of the TFSA at the date of death will be received tax-free by the deceased’s estate or other designated beneficiaries. There are no reporting requirements for these amounts.

Any investment income or gains that accrue under the former TFSA after the date of death will be taxable under the regular taxation rules that apply depending on the specific characteristics of the deposit or annuity contract. For more information on how to report these amounts, go to Guide T4015, T5 Guide – Return of Investment Income, or Guide T4013, T3 – Trust Guide, as applicable.

Trust governed by a TFSA

When the last holder of a TFSA which governs a trust dies, the arrangement continues to be treated as a TFSA for certain limited purposes. The main effect is to allow the trust to maintain its tax-exempt status until the end of the exempt period, which is the earlier of the end of the year following the year of death of the holder or when the trust ceases to exist.

While the trust maintains its exempt status, any payment made from the trust during the exempt period to the deceased’s estate or another designated beneficiary will be included in the recipient’s income for the year it’s received, except to the extent designated by the trust as being attributable to the FMV of the TFSA at death.

That is, only the portion of the payment that represents the distribution of post-death investment income or gains will be taxable. See the example below.

You have to prepare and file a T4A slip to report any taxable payments that you make each year during the exempt period to a beneficiary who is a resident of Canada. You do not need to report amounts that are required to be included in the income of a trust that is a former TFSA trust in its first taxable year. There is no requirement to withhold tax on these amounts.

The income must be recorded in box 134 “Tax Free Savings Account taxable amount” in the “Other information” section of the T4A slip. Send copies of the T4A slip to the recipient’s last known address.

For more information, go to Guide RC4157, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary.

You have to prepare and file an NR4 slip to report any taxable payments that you make each year during the exempt period to a beneficiary who is a non-resident of Canada. You are also required to withhold and remit non-resident withholding tax on these payments.

For more information on how to fill out an NR4 information return, go to Guide T4061, NR4 – Non-Resident Tax Withholding, Remitting, and Reporting.

If the trust still exists at the end of the exempt period, the trust will become taxable from that point forward and will have to file Form T3RET, T3 Trust Income Tax and Information Return, each year that it continues to exist. In its first taxable year, the trust will be required to include in its income any post-death income or gains that were not paid out to beneficiaries during the exempt period.

Designated beneficiaries

Designated beneficiaries can include a survivor who has not been named as a successor holder, former spouses or common-law partners, children, a designated subsequent survivor holder who is the new spouse or common-law partner of the successor holder, and qualified donees.

Chapter 2 – Tax payable on non-qualified investments

In this chapter, we explain the consequences for TFSA issuers of holding a non-qualified investment within a TFSA trust and related reporting requirements.

If a TFSA holds a non-qualified investment or carries on a business, the TFSA trust is taxable on any income earned on and any capital gains derived from the non-qualified investment or business. You must report such income on Form T3RET, T3 Trust Income Tax and Information Return.

The TFSA issuer has to report details of the non-qualified investment on the TFSA annual information return. For more information, go to Appendix A – Data elements – TFSA individual electronic record.

In addition, the TFSA issuer must provide the TFSA holder with the following information by the end of February following the reporting year:

• a description of the investment
• the date of acquisition or disposition, as applicable, and the FMV of the investment at that date
• the TFSA contract or account number

Responsibility for compliance with the qualified investment rules generally lies with TFSA issuers. In this regard, TFSA issuers must take reasonable care to ensure that TFSAs do not hold non-qualified investments.

For more information on non-qualified investments, go to Guide RC4466, Tax-Free Savings Account (TFSA), Guide for Individuals, and Income Tax Folio S3-F10-C1, Qualified Investments — RRSPs, RESPs, RRIFs, RDSPs, and TFSAs.

Chapter 3 – Tax on an advantage

In this chapter, we explain the tax consequences to a TFSA issuer when an advantage is extended in relation to the TFSA.

In most cases the holder is liable for the advantage tax. However, if the advantage is considered to be extended by the TFSA issuer, or by a person not dealing at arm’s length with the issuer, the issuer is liable to pay the tax, rather than the holder.

For more information, go to Guide RC4466, Tax Free Savings Account (TFSA), Guide for Individuals, and refer to “Tax payable on an advantage.” Also go to Income Tax Folio S3-F10-C3, Advantages — RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

If you are liable to pay tax on an advantage, you must fill out and send Form RC298, Advantage Tax Return for RRSP, TFSA, FHSA or RDSP issuers, RESP promoters, or RRIF carriers by June 30th after the end of the calendar year.

Chapter 4 – Tax payable on prohibited investments

If, in a calendar year, a trust governed by a TFSA acquires property that is a prohibited investment or if previously acquired property becomes prohibited, there are consequences for the TFSA holder in terms of reporting requirements and tax payable.

For more information, go to Guide RC4466, Tax Free Savings Account (TFSA), Guide for Individuals, and refer to “Tax payable on prohibited investments.” Also go to Income Tax Folio S3-F10-C2, Prohibited Investments — RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

Chapter 5 – Taxes on excess and non-resident contributions

TFSA holders are liable for a 1% per-month tax on their excess contributions and non-resident contributions. For more information, go to RC4466 Tax-Free Savings Account (TFSA), Guide for Individuals.

The application of these taxes will be administered by us. You, the issuer, do not have to specifically identify any withdrawals made by the holder to avoid the continued application of these taxes. Any such withdrawals will be reported as regular withdrawals. You also do not have to report to us when a holder becomes a non-resident.

Appendix A – Data elements – TFSA individual electronic record

When a monetary value is required, you must report the amount in Canadian dollars and cents. For more information, go to Income Tax Folio S5-F4-C1, Income Tax Reporting Currency. You must make reasonable efforts to determine the FMV when it is required to be reported. Do not report negative values, as negative values on the TFSA electronic record will result in the record being rejected. You can also find this information by going to TFSA annual information return.

Appendix B – Data elements – TFSA return summary

When a monetary value is required, you must report the amount in Canadian dollars and cents. For more information, go to Income Tax Folio S5-F4-C1, Income Tax Reporting Currency. You must make reasonable efforts to determine FMV when it is required to be reported. Do not report negative values, as negative values on the TFSA electronic record will result in the record being rejected.

Related forms and publications

Forms

• AUT-01, Authorize a Representative for Offline Access
• NRTA1, Authorization for Non-Resident Tax Exemption
• T3RET, T3 Trust Income Tax and Information Return
• RC1, Request for a Business Number and Certain Program Accounts
• RC193, Service Feedback
• RC236, Application for a Tax-Free Savings Account Identification Number
• RC298, Advantage Tax Return for RRSP, TFSA, FHSA or RDSP issuers, RESP promoters, or RRIF carriers
• RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties and Interest
• RC7259, Business Consent for Selected Listed Financial Institutions

Guides

• RC4157, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary
• RC4466, Tax-Free Savings Account (TFSA), Guide for Individuals
• T4013, T3 – Trust Guide
• T4015, T5 Guide – Return of Investment Income
• T4061, NR4 – Non-Resident Tax Withholding, Remitting, and Reporting

Income tax folios

• S1-F5-C1, Related Persons and Dealing at Arm’s Length
• S3-F10-C1, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs
• S3-F10-C2, Prohibited Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs
• S3-F10-C3, Advantages —RRSPs, RESPs, RRIFs, RDSPs, and TFSAs
• S5-F1-C1, Determining an Individual's Residence Status

Information circulars

• IC07-1R1, Taxpayer Relief Provisions
• IC18-1, Tax Free Savings Accounts
• IC76-12R8, Applicable rate of Part XIII tax on amounts paid or credited to persons in countries with which Canada has a tax convention
• IC77-16R4, Non-Resident Income Tax (Archived)
• IC82-2R2, Social Insurance Number Legislation that Relates to the Preparation of Information Slips
• IC89-3, Policy Statement on Business Equity Valuations
• IC97-2R19, Customized Forms

Digital services

Handling your business taxes online

My Business Account lets you view and manage your business taxes online.

Use My Business Account throughout the year to:

• make a payment online to the CRA with MyPayment, create a pre-authorized debit (PAD) agreement or create a QR code to pay in person at Canada Post
• file a return and view the status of filed returns
• submit documents to the CRA
• manage authorized representatives and authorization requests
• register to receive email notifications from the CRA and to view mail from the CRA in My Business Account
• manage addresses
• direct deposit information, program account names, operating names, phone numbers, and business numbers in your profile
• download rejected TFSA individual records
• track the progress of certain files you have submitted to the CRA
• submit an audit enquiry
• download reports
• request relief of penalties and interest
• manage Multi-factor authentication settings

To sign in to or register for the CRA’s online services, go to:

• My Business Account, if you are a business owner
• Represent a Client, if you are an authorized representative or employee

For more information, go to Digital services for businesses.

Receive your CRA mail online

Register for email notifications to find out when CRA mail, like your notice of assessment, is available in My Business Account.

For more information, go to email notifications from the CRA.

Create a pre-authorized debit agreement from your Canadian chequing account

A pre-authorized debit (PAD) is a secure, online self-service, payment option for individuals and businesses to pay their taxes. A PAD lets you authorize withdrawals from your Canadian chequing account to pay the CRA. You can set the payment dates and amounts of your PAD agreement using the CRA’s secure My Business Account service. PADs are flexible and managed by you. You can use My Business Account to view your account history and modify, cancel, or skip a payment. For more information, go to Pay by pre-authorized debit.

My Benefits CRA mobile web application

Get your benefit information on the go!

Benefit recipients can access the MyBenefits CRA mobile web application throughout the year to quickly view their benefit and credit payment details, eligibility information and application status.

For more information go to Mobile apps.

My Payment

My Payment is an electronic payment service offered by the CRA that allows individuals and businesses to make payments online directly to the CRA using their bank access cards Interac® Online®, Visa Debit®, or Debit MasterCard®.

Use this service to make a payment to one or more CRA accounts in one simple transaction.

For more information, go to My Payment.

For more information

If you need help

If you need more information after reading this guide, go to Taxes, or call 1-800-959-5525.

Forms and publications

The CRA encourages you to file your return electronically. If you require a paper version of the CRA's forms and publications, go to Forms and publications or call 1-800-959-5525.

Direct deposit

Direct deposit is a fast, convenient, and secure way to get your CRA payments directly into your account at a financial institution in Canada. For more information and ways to enroll, go to Direct deposit - Canada Revenue Agency or contact your financial institution. 

Electronic mailing lists

The CRA can notify you by email when new information on a subject of interest to you is available on the website. To subscribe to the electronic mailing lists, go to Canada Revenue Agency electronic mailing lists.

Tax Information Phone Service (TIPS)

For tax information by telephone, use the CRA's automated service, TIPS, by calling 1-800-267-6999.

Teletypewriter (TTY) users

If you use a TTY for a hearing or speech impairment, call 1-800-665-0354.

If you use an operator-assisted relay service, call the CRA's regular telephone numbers instead of the TTY number.

Formal disputes (objections and appeals)

You have the right to file an objection if you disagree with an assessment, a determination or decision.
For more information go to "File an objection".

CRA Service Feedback Program

Service complaints

You can expect to be treated fairly under clear and established rules and get a high level of service each time you deal with the CRA.

For more information about the Taxpayer Bill of Rights go to Taxpayer Bill of Rights.

You may provide compliments or suggestions, and if you are not satisfied with the service you received:

1. try to resolve the matter with the employee you have been dealing with or call the telephone number provided in the correspondence you received from the CRA. If you do not have contact information for the CRA, go to Contact information – Canada Revenue Agency.
2. If you have not been able to resolve your service-related issue, you can ask to discuss the matter with the employee’s supervisor.
3. If the problem is still not resolved, you can file a service-related complaint by filling out Form RC193, Service Feedback. For more information and to learn how to file a complaint, go to Submit service feedback.

If you are not satisfied with how the CRA has handled your service-related complaint, you can submit a complaint with the Office of the Taxpayers’ Ombudsperson.

Reprisal complaints

If you have received a response regarding a previously submitted service complaint or a formal review of a CRA decision and feel you were not treated impartially by a CRA employee, you can submit a reprisal complaint by filling out Form RC459, Reprisal Complaint.

For more information go to "File an objection".

Due dates

When the due date falls on a Saturday, a Sunday, or public holiday recognized by the CRA, your payment is considered on time if the CRA receives it on or before the next business day.

For more information, go to Important dates for corporations.

Cancel or waive penalties and interest

The CRA administers legislation, commonly called taxpayer relief provisions, that allows the CRA's discretion to cancel or waive penalties and interest when taxpayers cannot meet their tax obligations due to circumstances beyond their control.

The CRA’s discretion to grant relief is limited to any period that ends within 10 calendar years before the year in which a relief request is made.

For penalties, the CRA will consider your request only if it relates to a tax year or fiscal period ending in any of the 10 calendar years before the year in which you make your request. For example, your request made in 2023 must relate to a penalty for a tax year or fiscal period ending in 2013 or later.

For interest on a balance owing for any tax year or fiscal period, the CRA will consider only the amounts that accrued during the 10 calendar years before the year in which you make your request. For example, your request made in 2023 must relate to interest that accrued in 2013 or later.

Taxpayer relief requests can be made online using the CRA's My Account, My Business Account (MyBA), or Represent a Client digital services:

• My Account: After signing in select "Accounts and payments" then "Request relief of penalties and interest."
• MyBA or Represent a Client: After signing in, on the MyBa overview page, select the appropriate program from the navigation menu, then select the correct account. Finally select "Request relief of penalties and interest" under the "Request" heading. 

You can fill out Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties and Interest and send it with one of the following ways:

• online with My Account: select "Submit documents" under the "Correspondence" section
• online with MyBA or Represent a Client: select "Submit documents" from the banner at the top of the page
• by mail to the designated office, as shown on the last page of the form, based on your place of residence. 

For information on the "Submit Documents online" service, go to Submit documents online.

For more details on the required supporting documents, relief from penalties and interest, and other related forms and publications, go to Cancel or waive penalties and interest.