The department of Finance has announced its intention to reduce the annual TFSA Dollar Limit to $5,500, indexed to inflation, effective January 1, 2016. There will be no change to the 2015 TFSA Dollar Limit; it will remain at $10,000. It is not necessary for a TFSA contribution to be made by the end of 2015 in order to maintain the 2015 TFSA Dollar Limit of $10,000.
TFSA contribution room is accrued beginning January 1, 2009, for Canadian residents 18 years of age and older. Any unused contribution room is carried forward indefinitely.
A client’s available TFSA contribution room is a combination of any unused TFSA Dollar Limits from the current or previous years, plus any withdrawals made in a previous year, with the exception of withdrawals to correct an over-contribution.
Under the proposal from the Department of Finance, annual TFSA Dollar Limits are as follows:
- 2009-2012: $5,000
- 2013 and 2014: $5,500
- 2015: $10,000
- 2016 and subsequent years: $5,500, indexed to inflation
Therefore, a client who has not made any TFSA contributions, and qualified to accrue TFSA contribution room since 2009, is able to contribute up to $41,000 in 2015. In 2016, their cumulative TFSA contribution room will increase to $46,500.
Note: Hampton Securities is not responsible for calculating or keeping track of a client’s TFSA contribution room; this is the responsibility of the TFSA account holder.
For more information, please contact your Hampton Securities Investment Advisor.