Annual TFSA Limit Reverts to $5,500

Under proposed legislation, starting January 1, 2016, the annual TFSA dollar limit for 2016 will revert from $10,000 to $5,500 and will be subject to indexation provisions which previously applied – i.e. increase by inflation factor but only in $500 increments. The previous $10,000 limit was not going to be adjusted for inflation. With the 2016 limits as announced, the nominal lifetime contribution limit will have increased to $46,500.

TFSA contribution room for withdrawals is restored in the following calendar year. If you are trying to maximize your contributions – but have made withdrawals along the way -- check your limit as shown on your CRA My Account access. However, be aware that if taking withdrawals into consideration, your financial institutions may not have uploaded their transaction information for quite some time after the beginning of a new calendar year. Check back frequently.

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