Money you withdraw from a TFSA is added back to your room on January 1 of the following year, not the same year.
Example
| Date | What happens | Room |
|---|---|---|
| January 1, 2026 | Room available | $7,000 |
| March 2026 | Contribute $7,000 | $0 |
| August 2026 | Withdraw $3,000 | Still $0 for 2026 |
| January 1, 2027 | Withdrawal added back + 2027 limit | $3,000 + the new annual limit |
The trap
Putting the $3,000 back in before January 1, 2027 would be an over-contribution, taxed at 1% per month on the excess.
FAQs
When can I re-contribute a TFSA withdrawal?
From January 1 of the year after you withdrew it, unless you have other unused room.
Is a TFSA withdrawal taxed?
No. TFSA withdrawals are tax-free; the rule is only about when the room comes back.
Does transferring between my TFSAs count?
A direct transfer between your own TFSAs doesn't use room; withdrawing and re-depositing yourself does.
Plan it in minutes
Log withdrawals and the tracker adds them back on January 1, exactly as the CRA does.
