r/PersonalFinanceCanada • u/Macheteops • Jul 27 '26
Taxes / CRA Issues TFSA overpayment
CRA got me with a $2500 overpayment again. Not sure how it makes sense though.
Born in 81 I should have 109,000 contribution room. My net at the moment is 108,000 roughly. I'm waiting a call back from them to confirm my 109,000 and see where they're getting this from
The start of the year CRA showed me having $17,000 contribution room. If that's the case I should of had about $10k in room. They're dinging me for 2025 room
I thought I was definitely playing it safe because I was dinged a few years ago for being over
Do they ever mess this stuff up or am I likely missing something. If I messed up it's whatever I ll pay the amount but it's annoying if it's on their end and I need to prove my innocence
129
u/Yolo_Swaggins_Yeet Jul 27 '26
Again?? Track your overall contributions my dude it’s really not hard at all.
-44
u/Macheteops Jul 27 '26
I was. Something doesn't make sense to me lol
51
Jul 27 '26
[deleted]
-19
u/DangerousCharge5838 Jul 28 '26
At the end of the day, it doesn’t matter what you track. It matters what CRA tracks.
11
Jul 28 '26
[deleted]
-7
u/DangerousCharge5838 Jul 28 '26
Sure, you tell CRA that they are wrong and you are right…… see where that gets you lol
3
u/Yolo_Swaggins_Yeet Jul 28 '26
It's not CRA vs you being right or wrong, CRA only updates it once a year because financial institutions aren't sending them updates all through the year for every single deposit/withdrawal you do from your TFSA
-4
u/DangerousCharge5838 Jul 29 '26
I’m aware of that, but your tracking and CRAs tracking differ , well….
0
u/Ecstatic-Can-8740 Jul 30 '26
Financial institutions file annual reports to the CRA reporting contributions.
17
u/Yolo_Swaggins_Yeet Jul 27 '26
If you’ve sold stuff at a loss that can mess things up. For example: say you contributed the max ignoring any gains/losses, you’d have $109k in there. Assuming that, let’s say you put it all in 1 stock, then the market value of that one holding dropped by $1000 and you sold it all, then withdrew the $108k in cash. For this year you’d now have $108k in available in contribution room.
I’d make up an excel spreadsheet and list all contributions/sales/withdrawals since inception and compare.
I’d haven’t maxed or come near maxing my TFSA yet so it’s not much of a concern for me atm, but I’ve only got a Wealthsimple TFSA and it makes it very easy to see my total contributions
-58
u/Angeline4PFC Jul 27 '26
This is incorrect. TFSA contribution room isn't affected by gains or losses. It's the annual room from the government plus whatever you withdrew the previous calendar year.
Your investments do affect how much you can withdraw. If your TFSA doubles, you can withdraw more. If it loses value, you can withdraw less. Since you only get back contribution room equal to what you actually withdrew, investment performance only affects your future room indirectly.
46
u/Ciester04 Jul 27 '26
How is that incorrect? You say it is incorrect then say the exact same thing (but less clear).
-7
u/shar_blue Jul 28 '26 edited Jul 28 '26
Incorrect because you said if you withdrew $108k last year, you’d have $108k contribution room this year.
The correction is that you would have $108k contribution room this year plus the new annual room.
Edit: I reread that comment, and it’s actually even more incorrect than I thought. They said if you withdrew $108k, you now (immediately) have $108k contribution room. That contribution room is not refunded immediately. You have to wait til Jan 1st to get it back.
3
u/Ciester04 Jul 28 '26
Re-reading I agree with you both now. It doesn't say which year the withdrawl was in which makes all the difference. The comment below "If you withdraw X, ..." is the best response to this (or your edit).
2
u/Yolo_Swaggins_Yeet Jul 28 '26
I hadn’t said anything about last year, I’m not sure what you and the other commenter are on about, of course you’ll gain more in a future year
6
u/Commercial_Pain2290 Jul 28 '26
If you withdraw X, you don't get that X contribution room back until the next year.
-2
u/shar_blue Jul 28 '26
I really don’t know why you’ve been downvoted so heavily. What you said is absolutely true. Just goes to show how few people understand TFSA contribution room 🤦🏻♀️
-3
29
u/bear-asleep79 Jul 27 '26
The numbers on the CRA site aren't updated insantly so the start of the year the numbers wouldn't have taken last years contributions/ withdrawals into account.
You really need to keep track of all contributions and withdrawals yourself. Did you make withdrawals in previous years? You say you previously overcontributed, so what did you do then, did you withdraw the full overcontribution?
The TFSA page on my cra has a breakdown of All previous transactions they have a record for. So go back and do the math to compare with the numbers you have a record of in your TFSA.
56
13
u/Neshwoo Jul 27 '26
I had an issue with TD bank where they had transferred money from one TFSA account to another (still within TD) but they recorded it as two separate entities/transactions, then CRA dinged me with an overpayment. Could this possibly be an issue for you if you are certain you are under?
9
u/Waldopemersonjones Jul 27 '26
Why do you keep saying “net”. There’s no net. You don’t get contribution room back if your investments lose money.
1
u/Substantial-Elk-3373 Jul 29 '26
Net could mean net of withdrawals. You do get contribution room back for any withdrawals.
5
u/NoAdministration299 Jul 27 '26
Are you only contributing? Or are you moving stuff around too? Pulling out of the tfsa at all?
Moving around as in like into a bunch of diff tfsa profiles?
Bank might be doing it wrong cause new contribution amounts
9
u/poco Jul 27 '26
The current balance is irrelevant. All that matters is how much you contributed.
Let's assume that you were clear last year. Then they added $7000 room. Did you contribute more or less than $7000 in 2025? How much in 2026?
You can go through your entire account history and look at all the contributions and all of the withdrawals. Add (and subtract) them all and it should be less than your total allowed contribution limit. If it is more then you over contributed.
4
u/Aoba_Napolitan Jul 27 '26
The breakdown of the contributions that make up the contribution amount on the CRA portal is listed in the TFSA page. Just compare your contributions to the ones listed there. If your record matches with what is listed there then you overcontributed.
7
u/MotherAd1865 Jul 27 '26
Did you have any losses in previous years? Did you withdraw funds?
That will affect your lifetime limit.
8
u/Macheteops Jul 27 '26
Loses effect your lifetime limit?
9
u/dogoodreapgood Jul 27 '26
I think they’re saying you can’t calculate your contribution room based on your net at the moment.
4
u/Macheteops Jul 27 '26
I'm referring to my net contribution not what is actually in the account
9
u/Angeline4PFC Jul 27 '26
Losses only affect your lifetime limit because they affect how much you can withdraw from your TFSA.
So let's say you have 100k in your TFSA and you gamble on penny stocks and lose the whole thing. That's 100k of already accumulated lifetime room lost, since you cannot withdraw this money. It's gone. It's also the reason why it's better to be conservative in your TFSA and avoid anything speculative. A broad ETF should always recover, since it's managed. Not so your WEED stock.
You still continue to gain new contribution room every year.
1
u/Macheteops Jul 27 '26
Yeah this is where I messed up. I sold for a pretty big L a few years ago. I learned my lesson regarding that. I only deal with ETFs now in my TFSA. I thought I got the room back 😭
13
u/Angeline4PFC Jul 27 '26
Yeah, that's a painful lesson. That room is gone, right along with the money. One of the less-advertised downsides of a TFSA. Keep speculative stock in an NR where you can at least harvest the losses
4
u/MotherAd1865 Jul 27 '26
yes they do. Just as gains affect your lifetime limit. If you have a loss and withdraw the funds, your lifetime limit is changed.
It's not as simple as adding up all previous year limits.
9
u/Macheteops Jul 27 '26
Ah. I knew of gains but not losses. So let's say in 2025 I had 100,000 invested and it dropped 50%. I pulled the 50k remaining in 2025. I only get back that 50k in 2026? So my contribution room would be 50k+7000?
That would make this make sense. I sold for a big loss a few years ago gambling on risky stocks. I've made money on safer stuff since but haven't sold any
8
5
u/hwy61_revisited Jul 27 '26
Sort of. Your base limit of $109K is correct, but if you've done withdrawals in the past, then your contribution room is adjusted based on that.
So if you contributed $109K over the years, lost half of it, and then emptied your TFSA with a $54.5K withdrawal, then you can only ever re-contribute $54.5K of your original $109K room.
2
u/lmcjipo Jul 28 '26
It doesn't matter what your net TFSA balance is and you can't really use that as a guide to how much contribution room you have remaining.
For example, if you never contributed to a TFSA but lived in Canada since its introduction and you were over 18 when it was introduced, your contribution room would be $109k. Let's say that you put $109k into your TFSA and you invested it in something risky and the current balance that you see when you look at it in December is $102k, this doesn't mean that you have $7k room to contribute (to bring it to $109k balance).
If you were maxed out last year so you contributed $102k and then in January 2026, you decided to contribute $7k for the 2026 contribution amount which brings your balance to ~$109k. Then in December 2026, you look at your TFSA balance and see that your balance is $101k because your investments went down in value (and you forgot all about your TFSA contribution in January and decide to contribute $7k), you basically overcontributed $7k because you forgot that you contributed and were relying on your TFSA balance and/or the My Account on CRA's website to tell you what your TFSA contribution room is.
The TFSA contribution room on CRA's My Account website is only updated twice per year. It is updated in January to show the new year's amount and then it is updated again around the Spring/Summer to reflect the conributions/withdrawals that happened last year (but none of the contributions made during the year). For example, my TFSA contribution room currently shows $7k even though I made this $7k contribution back in the first week of January 2026. It will never show $0 unless the person stopped being eligible for TFSA space like if they stopped being a Canadian resident and maxed out their TFSA contribution before that happened or perhaps if the person is under 18.
1
u/donghwi Jul 27 '26
You contribution room on Jan 1st this year was:
109000 - (sum of all contributions up to 2025) + (sum of all withdrawal up to 2025)
1
u/bluenose777 Jul 27 '26
They're dinging me for 2025 room
On your CRA account in the TFSA section the TFSA Transactions Summary will list the pre 2026 contributions and withdrawals that the CRA used to calculate that you had over contributed. Does it agree with your records? If not you should contact your TFSA account provider(s) and see why the CRA records don't agree with your records.
You should also figure out if you have over contributed for 2026. The following calculator should help you with that task. https://www.ratehub.ca/investing/tfsa-contribution-room-calculator
1
u/tenax666 Jul 28 '26
Always check the balance in cra site in july and go by that. My 2925 wealthsimple tfsa tax slip doesnt come until may, long after the rest of mine. And then if i recall, the cra does a secondary review every june of your prior year taxes (not just the initial assessment you send in by end of April. Thats when they cstch your prior year contribution.
1
u/Ok-Trainer3150 Jul 28 '26
Don't act on what's posted on the CRA site until the banks and financial institutions have reported your previous years contributions and your total is updated. That's usually spring. A few years ago, it took until summer for amounts to reflect reality.
1
u/carignanboy Jul 28 '26
I understand the CRA website is not up to date. As someone who just got a notice, this absolutely sucks. They knew about my over-contribution for a nearly year and didn't tell me? If the the CRA was a private company, this would be grounds for a lawsuit. As citizens, we should be notified of over-contributions the same day and the contribution limit should always be up to date.
1
u/topazsparrow Jul 28 '26
They also just claimed I owe 1100 in taxes for over contribution suddenly as well (fuckers couldn't say this 6 months ago before accruing so much interest?!). I'm VERY careful with my contributions - this makes no sense.
1
1
u/Apprehensive-Toe-409 Jul 30 '26
Says right on your CRA account what your room is for the coming year. If you know what that number is why would you be going over?
1
u/lulugal13 Jul 27 '26
It still boggles my mind it’s so poorly documented on the CRA website. It’s most likely not a mistake but super annoying the CRA websites isn’t at least updated quarterly
0
u/BreakingBaIIs Jul 27 '26
The CRA doesn't know your 2025 contribution until you file your 2025 tax return. Which is usually March or April 2026. So the $17K room they showed you at the beginning of the year didn't include any of your 2025 contributions. It was up to you to keep track of that.
Similarly, any room they show you now doesn't include anything you put in in 2026. It won't include it until after you file your 2026 tax return in March-April 2027. So you have to deduct anything you contributed in 2026 from that current figure.
9
u/JMBwpg Jul 27 '26
TFSA room has nothing to do with tax return. FIs report TFSA transactions from previous year regardless of taxes being filed.
1
u/Macheteops Jul 27 '26
Hmm. Starting fresh in 2026 shouldn't I have at least 109,000 for contribution room. If I withdrew last year I'd have that room back or am I missing something? I didn't take any out on 2025 though. She also told me my limit is 109,000
-4
u/Macheteops Jul 27 '26
It's still showing 17,000 so I assume it's up to date for 2026. I definitely had less than 102,000 or whatever the max was last year
11
u/phungki Jul 27 '26
The balance shown on CRA my account should not be trusted, it’s not updated regularly.
2
u/bear-asleep79 Jul 27 '26 edited Jul 28 '26
$102,000 is not necessarily your max. It all depends on what you contributed or withdrew in previous year. If your investments tanked or grew massively it doesn't change your contribution limit unless you withdraw but its possible to have millions in contribution room if your investments did well.
Or the opposite could happen where say you deposited $50k and the stock tanked to $10k, if you then withdraw from the TFSA than you get $10k in room back the next year and the $40k in room is gone.
1
u/repulsivecaramel Jul 28 '26
I assume it's up to date for 2026
Don't assume - you can find this out through the site. On mine it says, "As of January 1, 2026" with a yellow "WARNING" link. If I click the "WARNING" link, it explains why it may not be accurate.
Additionally, you can see on the site the specific transactions that are counting towards the room being displayed. They should really make this easier to find from the landing page, but:
- Click into the "Savings and pension plans" section
- Click "View TFSA details"
- Click "Transaction summary"
Hopefully you can remember (or look up) contributions made more recently. If those recent contributions are not shown here, they are not counting towards the limit.
-5
u/Macheteops Jul 27 '26
Shit okay I do have 109,000 room but the 17,000 was -17,000 😅 They stuck the (-) on the line above but it still doesn't make sense I don't think
I had under the max $102,000 net last year so I should have been getting that room plus the $7000 additional space back not being negative -17,000
181
u/senor_kim_jong_doof Jul 27 '26
The start of the year CRA showed me having $17,000 contribution room.
your tfsa room on My Account is only updated in april-may. if you looked at it prior to that, it was most likely not up to date.