TFSA Limit for 2024 Increased to $ 7,000? | Tax Free Savings Accounts | Discussion forum

dougjp said
Global News is reporting this today:

https://globalnews.ca/news/10113516/tfsa-contribution-room-2024/  

Yep. The CRA formerly confirmed it on Nov 24.

Hwever, unless the TFSA law/regulation were to be changed, $7000 was a certaintly as soon as the April Year-over-Year inflation was known as that monthly number would have had to be 0% or less every month May to September for the TFSA limit to remain at $6500.

cgouimet said

Yep. The CRA formerly confirmed it on Nov 24.

Hwever, unless the TFSA law/regulation were to be changed, $7000 was a certaintly as soon as the April Year-over-Year inflation was known as that monthly number would have had to be 0% or less every month May to September for the TFSA limit to remain at $6500.  

Those who wish for $7500 in 2025 need to start wishing for that CRA Inflation Ave Oct 2023 to Sep 2024 to be => 4.70%

And, if the Liberals had left the contribution at $10k when they got elected, with indexing we'd be at $13k in 2024 ...

If the Liberals had left the contribution at $10k when they got elected, with indexing we'd be at $13k in 2024 ...

cgouimet said

And, if the Liberals had left the contribution at $10k when they got elected, with indexing we'd be at $13k in 2024 ...

Not true.

The amendments to the Income Tax Act that gave the $10,000 TFSA annual dollar limit also removed the indexing. The three versions of the definition of "TFSA dollar limit" are in this previous post:

This was the definition in the Income Tax Act before the TFSA limit increase amendment:

“TFSA dollar limit” for a calendar year means,

(a) for 2009, $5,000; and

(b) for each year after 2009, the amount (rounded to the nearest multiple of $500, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $5,000 adjusted for each year after 2009 in the manner set out in section 117.1.

This is the current definition after the TFSA limit increase amendment:

“TFSA dollar limit” for a calendar year means,

(a) for 2009 to 2012, $5,000;

(b) for 2013 and 2014, $5,500; and

(c) for each year after 2014, $10,000.

This will be the definition after the proposed amendment in the Notice of Ways and Means Motion:

“TFSA dollar limit” for a calendar year means,

(a) for 2009 to 2012, $5,000;

(b) for 2013 and 2014, $5,500;

(c) for 2015, $10,000; and

(d) for each year after 2015, the amount (rounded to the nearest multiple of $500, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $5,000 adjusted for each year after 2009 in the manner set out in section 117.1.

$110K.

Your TFSA limit is always the higher of the accumulated amount you withdraw the year before vs the cumulative limit set by the government for that year

(based on the years you qualify...in other words, if you are a youngen, and not just at heart, you may not qualify for all the years 😉 )

lifeonanisland said

Agreed, but perhaps a little overly complicated? The amount you withdraw from your TFSA in any given year is the amount you're allowed to contribute in the following year, plus the allowable amount for the following year. (103K + 7K = 110K)  

So it's safe to say I'm good for 110k this year.. I just don't want to get dinged the 1% over..

victor6433 said

So it's safe to say I'm good for 110k this year.. I just don't want to get dinged the 1% over..  

Yes. You withdrew the 103K in 2023 which can be recontributed in 2024 + the new yearly allowance, which is 7K this year = 110K without any dinging, lol.

Also, never trust the CRA contribution limit number, especially before May of the following year as most financial institution will not submit contributions/withdrawals until tax time and the CRA doesn't get updated immediately. Ultimately, we are responsible for keeping track of our own limits.

The increase to $7K is now in place. I added my seven large yesterday.