New to Canada?
If you are a new immigrant or permanent resident to Canada, you are allowed (and encouraged) to open a TFSA as soon as you arrive, so long as you have a valid social insurance number and are at least 18. This is actually an advantage over having an RRSP, as in order to contribute to one you need Canadian income from the previous year (that’s how your RRSP’s annual limit is calculated), and if you are new to the country you won’t have any for at least the first year!
The year when you arrive in Canada determines when your TFSA contribution limits begin. If you arrived in Canada in 2015 but only opened your TFSA in 2016, your current contribution limit is based on 2015 ($10,000 in 2015 + $5500 in 2016 + $5,500 in 2017 + $5,500 in 2018 + $6,000 in 2019 + $6,000 in 2020 = $38,500). The time of year when you arrive is irrelevant…whether you arrived in March or November of 2015, you are allowed to contribute the full 2015 amount of $10,000 (in addition to the full 2015-2020 amounts).
Resident vs. non-resident
If you switch back-n-forth between being a resident and a non-resident of Canada, then the rules will switch too. While you are a Canadian resident, follow the resident rules. While you are a non-resident, follow the non-resident rules. This can get quite complicated and messy if you are switching back and forth a lot, so it’s a good idea to have a professional tax specialist look at your situation and advise you on how to handle your TFSA.
Temporary foreign workers
If you have a SIN starting with a ‘9’, you are most likely a temporary foreign worker or refugee claimant, and have a temporary SIN which will expire at some point. You are still allowed to open, contribute, and withdraw from a TFSA just like any other Canadian resident, but keep an eye on the expiry date. And if you transition from a temporary SIN to a permanent SIN you will have to notify the institution or brokerage firm holding your TFSA so they can transition your new SIN over.
While the CRA explicitly allows those with a temporary SIN to have a TFSA, there seems to be some confusion with some banks refusing to issue TFSA’s to those in this situation. If you fall into this category it’s best to check with the CRA to discuss the bank’s concerns.
Sources:
http://www.moneysense.ca/invest/ask-moneysense
http://financialcrooks.com/how-much-can-contribute-tfsa-just-18-immigrant-canada-after-2009/
20 Comments. Leave new
Hi! I arrived in Canada as a permanent resident in 2016, openend a TFSA and filed taxes normally since then. When looking at my contribution room, it’s showing me all the years since I turned 18 and adds them, so I have a lot of room… but I thought only the years in Canada count….?
Hi Linda,
It sounds like you are checking your contribution room amount on CRA’s website. Best to call them directly to double-check what your contribution room is, as the website is not always accurate. You are correct in thinking that your years as a permanent resident of Canada should only count as towards your TFSA contribution room. Please call CRA directly in order to get your exact contribution room amount: 1-800-959-8281.
Hello, what is a TSFA? Is there an interest that can someone earn?
Hi Michael,
A TFSA is a Tax-Free Savings Account that allows Canadians 18+ and over to save money, tax-free. It is registered with the government and allows for investment income including capital gains, dividends, and interest to grow and be withdrawn without paying additional taxes. You can find out more here: https://tfsahelper.ca/general-tfsa-information/what-is-a-tfsa/
If you are not comfortable with the stock market, you can open a high interest savings account for your TFSA. You can find out more, including approximate interest rates, here: https://tfsahelper.ca/investment-related/high-interest-savings-accounts/
Hi. I came to Canada in 2018 but no income made within Canada this year. Am I still eligible to contribute a max of 5500 of year 2018?
Hi Rosa,
TFSA contribution room is not based on income. If you were a Canadian citizen in 2018, yes, you could contribute $5500 for 2018, and an additional $6000 for 2019 for a total of $11,500. Call CRA if you are unsure, however. 1-800-959-8281.
hi i arrived in canada december 2015 and landed as a permanent resident..i would like to know if 2015 counts as a year for me for tfsa thank you!
Hi Benard,
As far as we know, the month of your arrival as a permanent resident doesn’t matter. If you came here in late 2015, you should still be eligible to use 2015’s contribution room towards your overall limit.
To be sure, check with Canada Revenue Agency at 1-800-959-8281.
Hi,
I came to Canada in September 2016, what is my contribution limit? Does the month influence the number of years?
Thanks
Hi Clarissa,
As far as we know, only the year that you arrived in Canada (assuming as a permanent resident), matters.
If you came in 2016 with PR status, your current contribution limit would be as follows:
2016: $5,500 +
2017: $5,500 +
2018: $5,500
—————
$16,500
Either way, a quick check with Canada Revenue Agency at 1-800-959-8281 is a good move.
Hi I have a TFSA account but I’m not sure how much I can contribute now.. I came in canada august 2014 and opened TFSA account year 2015. THANKS
Hi there,
The date you open a TFSA account does not affect contribution room. What matters is when you received your citizenship or permanent residency in Canada. Assuming you had one of these statuses as of 2014, your contribution room would be as follows:
2014: $5,500 +
2015: $10,000 +
2016: $5,500 +
2017: $5,500 +
2018: $5,500 +
——————
= $32,000
Best to call Canada Revenue Agency directly at 1-800-959-8281 to speak with an agent, but it would appear that your current contribution room is $32,000.
Hello, I arrived have been in Canada since 2014 with various visas and now I am a permanent resident since 2017. When I go to CRA it says I have the 57,500 of contribution room. Is this correct. It is the maximum. I would like to use it but I don’t want to be taxed.
Hi Chichi,
It’s best to call CRA directly to double-check, but it seems unlikely that your contribution room is $57,500. Hypothetically, even if you qualified for a TFSA in 2014, your contribution room would still be only $32,000, as per below:
2014: $5,500
2015: $10,000
2016: $5,500
2017: $5,500
2018: $5,500
——————
$32,000
Again, best to call CRA and speak with an agent. Sometimes what’s displayed online might not be fully accurate.
i have permanent resident since may 2017. how much i can contribute in TFSA?
Hi Ivan,
As far as we know, your contribution limit is currently $11,000. You earned $5,500 in contribution room the year you came to Canada (2017) + you will add the $5,500 allocated to all Canadians for 2018. Therefore, $5,500 + $5,500 = $11,000.
I became a landed resident in 2013. Till date I have contributed about $4000. What is the max amount I can contribute now. I want to max out my tfsa room.
Hi Tombee,
Assuming you haven’t made any withdrawls from your TFSA, you can use the contribution you accumulated ever year since and including 2013. So, as of 2018, you would have:
2013: $5,500
2014: $5,500
2015: $10,000
2016: $5,500
2017: $5,500
2018: $5,500
———–
$ 37,500 – $4,000 you’ve already deposited = $33,500 Total Contribution Room Available
Double check with CRA to be sure. You can call them at: 1-800-959-8281
I have account in Rbc and have opened TFSA and want to open RRSP ,is there any limitation can I open .
Hi Sam,
Yes, you can have both a TFSA and RRSP with RBC, or with another institution. The two accounts are very different.