How to Track Your TFSA Contributions in 2026 (and Avoid Penalties)
Over-contributing to your TFSA costs 1% per month in penalties. Here is how to calculate your room, track contributions accurately, and stay on the right side of the CRA.
The Tax-Free Savings Account is one of the best tools available to Canadian investors. Every dollar of growth inside a TFSA -- whether from interest, dividends, or capital gains -- is completely tax-free. Withdrawals are tax-free. There is no impact on income-tested benefits like OAS or GIS. It is, by almost any measure, the most flexible registered account in Canada.
But there is one costly mistake that thousands of Canadians make every year: over-contributing. The penalty is 1% per month on the excess amount, and the CRA does not send you a warning before it happens. You find out when the tax bill arrives. In some cases, Canadians have racked up hundreds or even thousands of dollars in penalties they did not see coming.
The good news is that over-contribution is entirely preventable. You just need to know your contribution room and track what goes in and out. Here is exactly how to do that.
TFSA contribution room: how it works
Every Canadian resident aged 18 or older accumulates TFSA contribution room each year. The annual limit is set by the federal government and is indexed to inflation, rounded to the nearest $500. Here are the annual limits since the TFSA was introduced:
| Year(s) | Annual Limit |
|---|---|
| 2009 - 2012 | $5,000 |
| 2013 - 2014 | $5,500 |
| 2015 | $10,000 |
| 2016 - 2018 | $5,500 |
| 2019 - 2022 | $6,000 |
| 2023 | $6,500 |
| 2024 | $7,000 |
| 2025 | $7,000 |
| 2026 | $7,000 |
If you were 18 or older in 2009 and have been a Canadian resident every year since, your total lifetime contribution room as of 2026 is $102,000. If you turned 18 later, your room starts accumulating from the year you turned 18 (or the year you became a Canadian resident, whichever is later).
How to calculate your available TFSA room
Your available contribution room is determined by a simple formula:
Available Room = Lifetime Limit - Total Contributions + Total Withdrawals (from prior years)
There are three critical details in that formula that trip people up:
Withdrawals restore room, but not until the following January
If you withdraw $5,000 from your TFSA in June 2026, that $5,000 is not added back to your room until January 1, 2027. If you re-contribute $5,000 in the same year you withdrew it, you have over-contributed by $5,000 (assuming you had zero room left).
Transfers between TFSAs do not count -- if done correctly
Moving money between TFSA accounts at different institutions must be done as a direct institutional transfer, not as a withdrawal and re-contribution. If you withdraw from one TFSA and deposit into another in the same year, both transactions count -- the withdrawal does not restore room until next year, and the deposit counts as a new contribution immediately.
Investment gains and losses do not affect your room
If you contribute $7,000 and your investments grow to $12,000, you have not over-contributed. Your contribution room is based solely on what you put in, not what your account is worth. Conversely, if your investments drop to $3,000, you have still used $7,000 of room.
The over-contribution penalty explained
If your TFSA contributions exceed your available room at any point during a month, the CRA charges a penalty of 1% per month on the highest excess amount in that month. This penalty is not a one-time fee -- it accumulates every single month the excess remains in your account.
For example, if you over-contribute by $3,000 and do not correct it for six months, you owe $30 per month x 6 months = $180 in penalties, plus you need to file a special tax return (RC243) and pay interest on any late penalty payments. The CRA can also deny requests to waive the penalty if the over-contribution resulted from a transaction you initiated (as opposed to a bank error).
The most common scenario leading to over-contribution is the withdraw-and-recontribute mistake described above. Someone withdraws $10,000 for an emergency, then puts it back a few months later without realizing the room has not been restored yet. A $10,000 over-contribution at 1% per month adds up fast.
How to check your TFSA room with the CRA
The CRA maintains a record of your TFSA contribution room. You can access it through CRA My Account online. Here is how:
- 1
Log in to CRA My Account
Go to the CRA website and sign in using your credentials, or through your bank via the Sign-In Partner option. If you do not have an account, you will need to register first -- this takes a few days for the mailed security code.
- 2
Navigate to TFSA section
Once logged in, look for the "TFSA" or "Tax-Free Savings Account" section. This is typically found under "Accounts and Payments" or the main dashboard.
- 3
Review your contribution room
The CRA will show your current TFSA contribution room, your total contributions to date, and any withdrawals. This information is based on data reported by your financial institutions.
- 4
Verify against your own records
Financial institutions report to the CRA with a lag -- sometimes weeks or months. If you made a contribution recently, it may not appear yet. Always cross-reference the CRA data with your own tracking.
Important caveat: The CRA data can be delayed. Financial institutions report TFSA transactions once a year, and the CRA updates your room accordingly. If you made contributions or withdrawals recently, the CRA's number may not be current. This is exactly why you need your own tracking system in addition to checking CRA My Account.
Tracking TFSA contributions with TrackWorth
The most reliable way to avoid over-contributing is to track every contribution and withdrawal yourself in real time, rather than relying solely on the CRA's delayed reports. Here is how to set it up with TrackWorth:
Add each TFSA as a separate asset
If you have TFSAs at multiple institutions (e.g., a TFSA savings account at one bank and a TFSA investment account at a brokerage), add each one individually. Label them clearly so you can tell them apart.
Update balances monthly
Log the current market value of each TFSA once a month. This takes less than a minute per account and gives you a clear picture of how your tax-free savings are growing over time.
Log contributions and withdrawals as transactions
Each time you contribute or withdraw, record it as a transaction in TrackWorth. This gives you a running history you can reference at any time -- much faster than digging through bank statements.
Set a contribution goal
Create a goal in TrackWorth for your annual TFSA contribution target (e.g., "Contribute $7,000 to TFSA by December 2026"). The progress bar shows how much room you have left to fill.
By keeping your own records alongside the CRA's, you always know your true available room -- even before the CRA catches up with the latest data from your banks. It also helps you see exactly how your tax-sheltered accounts fit into your overall net worth.
Common TFSA mistakes to avoid
Withdrawing and re-contributing in the same year
This is the number-one cause of TFSA over-contribution penalties. If you need emergency funds, plan to wait until January of the next year before putting the money back.
Ignoring your TFSA room when you turn 18
Contribution room starts accumulating the year you turn 18, but only if you are a Canadian resident and have a valid SIN. If you were not a resident for some years, those years do not count.
Confusing account value with contribution room
If your TFSA investments doubled in value, you did not gain extra contribution room. Conversely, if your investments lost money, you did not gain room back either. Room is based purely on deposits and withdrawals.
Not tracking transfers between institutions
Always request a direct transfer when moving TFSA money between financial institutions. A withdrawal-then-deposit approach uses contribution room on the deposit side and does not get the withdrawal room back until the next calendar year.
Frequently asked questions
What is the TFSA contribution limit for 2026?
The 2026 TFSA annual contribution limit is $7,000. If you have been eligible since 2009 and have never contributed, your total available room is $102,000. If you have contributed in previous years, subtract your net contributions (contributions minus withdrawals from prior years) to get your current available room.
Can I have multiple TFSA accounts?
Yes. You can hold TFSAs at multiple financial institutions. However, your contribution room is shared across all of them. Contributing $4,000 to a TFSA at one bank and $4,000 to a TFSA at another uses $8,000 of your total room. This is why personal tracking is essential -- no single bank knows about your other TFSA accounts.
Should I prioritize my TFSA or RRSP?
It depends on your income, tax bracket, and retirement plans. For most Canadians earning under $55,000, the TFSA is the better starting point. For those earning above $80,000, the RRSP deduction becomes more valuable. We cover this decision in detail in our guide on RRSP vs TFSA: which to max out first.
What happens if I accidentally over-contribute?
Withdraw the excess amount as soon as you discover it. The penalty is 1% per month on the excess, so the sooner you correct it, the less you owe. You will need to file Form RC243 (TFSA Return) and pay the penalty. In cases of genuine errors (like a bank processing issue), you can write to the CRA to request a penalty waiver, though approval is not guaranteed.
Do I need to report TFSA income on my tax return?
No. Income earned inside a TFSA -- interest, dividends, and capital gains -- does not need to be reported on your tax return. Withdrawals are also not reported as income. The only TFSA-related tax filing is the RC243 form if you have over-contributed.
Related: RRSP vs TFSA: Which Should You Max Out First? · The Power of Compound Interest (With Real Examples)