Frequently Asked Questions Tax‑free savings account

Show all Hide all

What is the TFSA?

The TFSA is a savings account that is registered with the Canada Revenue Agency and can earn tax‑sheltered investment income. The interest and earnings from your investments in a TFSA are not taxable, either federally or provincially.

What are the differences between an RRSP and a TFSA?

Unlike an RRSP, contributions to a TFSA are not deductible from taxable income. However, gains made on investments in a TFSA and withdrawals from a TFSA are not taxable, either federally or provincially.

Who can contribute to a TFSA?

To contribute to an Épargne Placements Québec TFSA, you must be domiciled in Québec.

Any individual who is 18 years of age or older and who has a valid social insurance number (SIN) is eligible to open a TFSA.

A person determined to be a non-resident of Canada for income tax purposes can hold a valid SIN and be authorized to open a TFSA. However, any contributions made while a non-resident will be subject to a 1% tax for each month the contribution remains in the account. For more information, visit the Canada Revenue Agency site.

Can a legal person (corporation, partnership, trust, etc.) open a TFSA?

No, this form of investment designed to foster saving is available only to individuals.

Is there an age limit for contributing to a TFSA?

No, unlike an RRSP, there is no upper age limit for contributing to a TFSA.

How much can be contributed to a TFSA each year?

Here is the annual contribution limit:

Year Annual limit
2009 to 2012 $5 000
2013 and 2014 $5 500
2015 $10 000
2016 to 2018 $5 500
2019 $6 000

How is the TFSA contribution limit set?

A saver’s contribution limit is determined, regardless of his income, according to:

– The maximum annual contribution set by the Canada Revenue Agency.
– The amounts withdrawn during the prior year.
– Unused contribution room from prior years.

Does the contribution amount vary with investment gains?

No, the annual contribution limit, determined by the Canada Revenue Agency, does not vary with investment gains.

What happens if I exceed my annual contribution room?

Contributions in excess of the annual limit are subject to a penalty of 1% per month for each month such excess contributions remain in the account. Unlike an RRSP, where it is possible to have a maximum excess contribution of $2 000, any excess contribution in a TFSA is penalized.

Can contribution room be carried forward from year to year?

Unused contribution room is carried forward indefinitely.

Can contributions be made to a joint TFSA?

No, contributions cannot be made to a joint TFSA.

Can TFSAs be held at more than one financial institution?

Yes, just like an RRSP, TFSAs can be held at more than one financial institution, provided the annual contribution room is not exceeded.

Are there restrictions on withdrawals?

No, withdrawals can be made from the TFSA, in accordance with the characteristics of the products held, i.e. the minimum withdrawal amount, maturities or redemption possibilities on the anniversary date.

What happens to my TFSA if I die and have designated my spouse as beneficiary of my TFSA in my testamentary dispositions?

Your spouse will be able to deposit the amounts received in his or her own TFSA without affecting their unused contribution room. However, two conditions must be met to be entitled to this benefit:

– Payment of the amounts must be made no later than December 31 of the year following your death;
– Within 30 days following the date of contribution to their TFSA, your surviving spouse must file the form Designation of an Exempt Contribution to a Survivor Tax‑Free Savings Account (TFSA) with the Canada Revenue Agency. The form is available on the Agency’s website.

What happens to my TFSA if I have more than one heir and I have not designated my spouse as beneficiary of my TFSA?

At your death, your account will cease to be a TFSA. The amounts it contains will be shared among your heirs, in accordance with your testamentary dispositions. Your heirs will be able to use their inheritance to contribute to their TFSA to the extent of their available contribution room.

What Épargne Placements Québec products can be held in a TFSA?

All products sold by Épargne Placements Québec can be held in a TFSA.

However, you cannot hold a Payroll Periodic Savings Plan simultaneously in an Investment Savings Account and in a TFSA.

What types of interest can be paid in a TFSA?

Interest can be compounded annually, paid annually or paid monthly.

Interest paid annually or monthly will be deposited in the TFSA Flexi‑Plus Savings.

How can a purchase be made in a TFSA?

All Épargne Placements Québec products are eligible for the TFSA. To invest in a TFSA, follow the same procedure as you would to purchase products in an Investment Savings Account or an RRSP, RRIF, LIRA or LIF account.

Is it possible to accumulate funds in a TFSA through a Periodic Savings Plan (PSP)?

Yes, it is possible to accumulate tax‑sheltered funds by means of the PSP by instalments and the payroll PSP. However, you cannot hold a payroll PSP simultaneously in an Investment Savings Account and in a TFSA.

Could I transfer products I have with Épargne Placements Québec to the TFSA?

For a new contribution, all products held, except for Québec Stock Index Bonds, can be transferred to a TFSA, provided the products are transferrable and as long as the transfer satisfies the characteristics of the product and the type of account from which it is taken.

Are there management or administration charges for a TFSA?

As with any other transaction made with Épargne Placements Québec, no management or administration fees influence the return on your investments in an Épargne Placements Québec TFSA.

Questions on the TFSA?
Contact an investment officer.

Welcome to our new, more dynamic and attractive website, with the same relevant contents. Happy browsing!