Tax payable on TFSAs

Generally, interest, dividends, or capital gains earned on investments in a TFSA are not taxable either while held in the account or when withdrawn.

There are, however, certain circumstances under which one or more taxes may be payable with respect to a TFSA. The following sections provide information and examples of when and how these taxes are payable, and by whom.

Normally, in most TFSA situations, there is no tax payable, and therefore, a TFSA return is not required; however, where one or more of TFSA taxes are applicable a TFSA return is required must be filled out and sent by June 30, of the year following the calendar year in which the tax arose.

Services and information

• TFSA excess letter and proposed return explained
  TFSA excess amount correspondence explained, waiver of taxes, and what should you do if you disagree with your assessment 
• TFSA payment of taxes
  Tax owing on over contributions made to your TFSA
• Tax payable on non-qualified investments
  Implications when TFSAs contain non-qualified investments
• Tax payable on prohibited investments
  Implications when TFSAs contain prohibited investments
• Tax payable on non-resident contributions
  Implications of contributing to your TFSA while being a non-resident of Canada
• Tax payable on an advantage
  Implications of benefits, loans or debts in relation to a TFSA

Forms and publications

• Form RC243, Tax-Free Savings Account (TFSA) Return
• Form RC243-SCH-A, Schedule A – Excess TFSA Amounts
• Form RC243-SCH-B, Schedule B – Non-Resident Contributions to a Tax-Free Savings Account (TFSA)