TFSA Contribution Limit by Year | Total Tax-Free Savings Account Room
All Canadians love their Tax-Free Savings Account or TFSA. This is an amazing investment tool devised by the government of Canada to encourage Canadians to invest and grow their money without undergoing taxes. It’s that simple.
However, one of the strictest rules the Canada Revenue Agency (CRA) imposes on TFSA is the contribution room or contribution limit. Since this number changes every year and also undergoes some other conditions, it can be a little tricky to know your total contribution room.
What is the TFSA Contribution Room?
The Tax-Free Savings Account contribution room or TFSA contribution limit is the maximum dollar amount an individual can invest in their TFSA. This limit is implemented to prevent Canadians from hoarding money in their TFSA and enjoy the tax haven the CRA itself has created.
Ever since the TFSA program was introduced in 2009, the contribution room has been increasing every year. The below table shows how the contribution room has increased annually.
TFSA Contribution limits and total room growth by year since inception
| Year | The annual TFSA dollar limit | Total TFSA room since inception |
|---|---|---|
| 2009 | $5,000 | $5,000 |
| 2010 | $5,000 | $10,000 |
| 2011 | $5,000 | $15,000 |
| 2012 | $5,000 | $20,000 |
| 2013 | $5,500 | $25,500 |
| 2014 | $5,500 | $31,000 |
| 2015 | $10,000 | $41,000 |
| 2016 | $5,500 | $46,500 |
| 2017 | $5,500 | $52,000 |
| 2018 | $5,500 | $57,500 |
| 2019 | $6,000 | $63,500 |
| 2020 | $6,000 | $69,500 |
| 2021 | $6,000 | $75,500 |
| 2022 | $6,000 | $81,500 |
The annual TFSA contribution limit for 2022 is CA$6,000
What this means is that anyone who was above 18-years-old and was a resident in Canada in 2009, will now have a total TFSA contribution limit of $81,500 in 2022.
If you turned 18 after 2009, your contribution room will start counting from the year you turned 18.
The best place to find your contribution room is through your MyCRA account with Canada Revenue Agency.
It is crucial that you know your contribution limit and not exceed it. CRA will impose some serious penalties on individuals who over-contribute to their TFSA. The main penalty is being taxed at 1% per month on the over-contributed amount.
Do capital gains count as TFSA contributions?
Short answer: no. Only the actual cash amounts you deposit into your TFSA will count towards the contribution limit. If you invested $60,000 in 2020, and the holdings grew to $80,000 by 2021, this increase does not consume your contribution limit of 2021.
Do dividends count as TFSA contribution?
Same as above, you can earn dividends in your TFSA which will be not only tax-free income but also will not count towards your contribution room.
Do capital losses increase your TFSA contribution room?
Short answer: no. Neither capital gains/appreciations nor capital losses have any impact on the contribution room of your TFSA. Your money can grow or decline, and CRA will neither tax you on gains nor will compensate you for any losses.
If you have any questions about TFSA contribution limits, let us know in the comments below. We will try our best to answer you.
