Lesson Making a withdrawal

Withdrawing from a TFSA

Learn how withdrawals from a TFSA may impact your contribution room.

Withdrawals from a TFSA account are tax-free, and do not count towards your income for the year. However any funds withdrawn from a TFSA can only be ‘re-contributed’ that same year if you have the available contribution room.

This is generally not a concern unless you plan to re-contribute the withdrawn amount, and you are close to, or at your TFSA limit.

On January 1st in the following calendar year, this will ‘reset’ and you’re free to re-contribute the withdrawn amount if you’d like.

In addition, every year on January 1st. you gain additional TFSA contribution room if you’re a Canadian resident over the age of 18. For 2023, this amount is $6,500 for example.

You can also check your TFSA contribution limit/room on the CRA’s myAccount page at any time.

For example: If you withdraw $5,000, you will regain the $5,000 in room next year on January 1, plus add any additional contribution from for the year.

Note: The information in this blog is for educational purposes only and should not be used or construed as financial or investment advice by any individual. Information obtained from third parties is believed to be reliable, but no representations or warranty, expressed or implied, is made by Questrade, Inc., its affiliates or any other person to its accuracy.

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