CRA delayed in updating TFSA contribution room. Better to wait, advisors say

Unless you are willing to calculate your Tax-Free Savings Account contribution room, you’ll have to wait for the Canada Revenue Agency to get caught up. Individual contribution room is usually readily available by signing into your CRA account. Alternatively, you can usually call the Tax Information Phone Service. However, that hasn’t been so since mid-April . Up-to-date numbers indicating taxpayer TFSA contribution room for 2025 haven’t been made available. Unlike RRSP contribution room, “TFSA room is not shown on your notice of assessment,” says Jason Heath, managing director of Objective Financial Planners in Toronto. “Even when you try to view your TFSA details like the contribution history, it too is unavailable.” Instead, a warning has been posted on the CRA site, says Robert Kepes, a tax lawyer with Toronto firm Morris Kepes Winter LLP. The warning states : “TFSA information, including contribution room, is updated once your financial institution’s annual TFSA return is processed. We are experiencing delays in processing these returns as a result of a new data validation process. TFSA information is temporarily unavailable in your CRA account to prevent errors.” Instead, the CRA is suggesting taxpayers calculate it themselves using the following: Form RC343, Worksheet – TFSA contribution room . And there is an added CRA reminder to keep records of your TFSA transactions “to make sure that your contributions do not go over your TFSA contribution room,” which is what taxpayers are concerned about in the first place. As to when this will be resolved, “the CRA has yet to provide a timeline for resolution,” says Heath. You could try to determine your TFSA room by looking at all your past contributions and withdrawals since 2009 when TFSA accounts were introduced, he says. If you were 18 or older in 2009 and have always lived in Canada, your cumulative TFSA room would be $102,000. But there’s a big caveat. “The problem is a mistake could lead to a TFSA overcontribution, and financial institution records may not go back 16 years.” An overcontribution is no small matter. “The risk of making an overcontribution is significant. There is a penalty of 1 per cent per month for any overcontribution to a TFSA. And if a contributor messes up and forgets, it may be years from now (before the) CRA notices. Years of penalties and interest can add up fast, and CRA does not always show leniency with inadvertent errors.” So, it may be better to be safe than sorry. “As such, TFSA holders may want to wait if they are uncertain about their TFSA room until CRA’s records are updated,” Heath suggests. Meanwhile, the CRA says it’s aware of this concern. In an email to National Post, Sylvie Branch with CRA media relations writes that the agency recognizes the importance of its online services for taxpayers and “strives to minimize service outages.” TFSA contribution room is generally updated on Jan. 1 of each year to reflect the new annual TFSA limit, says Branch. Adjustments to the contribution room are made when a taxpayer’s financial institution’s TFSA annual information return has been processed by the CRA. However, this year’s delay, says Branch, stems from the agency striving to improve data accuracy. Echoing the warning on the CRA site, she writes of the agency introducing a new data validation process in January 2025. The institutions filing the information “had to get accustomed to the new system, adapt to new processes, and … contend with stricter validation of the data they submit to the CRA.” “As a result, there have been significant delays in processing TFSA annual information returns this year. Resolving our system issues, is our priority, so that we can update TFSA information in My Account as soon as possible.” Unfortunately, she adds, the CRA does “not have an expected date for the resumption of service. We regret the inconvenience and thank taxpayers for their patience.”

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