Who can I talk to about a Tax Free Savings Account (TFSA)?

You can speak with a staff member at NBTA Credit Union at any time about opening your TFSA or making changes to an existing TFSA. Call our main line at 506-452-1724 or 1-800-565-5626 (Toll Free in NB) to speak to someone or visit our Fredericton branch at 650 Montgomery Street.

What is the Tax Free Savings Account?

The TFSA is a registered savings account that allows taxpayers to earn investment income tax-free inside the account. Contributions to the account are not deductible for tax purposes. However, withdrawals of contributions and earnings from the account are tax- free.

TFSA savings can be used for a variety of needs, for example: to purchase a new car, renovate a house, start a small business or take a family vacation.

When will it be available?

TFSA’s are available now! (Began January 1, 2009)

Who is eligible to open a TFSA?

Any individual (other than a trust) who is a resident of Canada and 18 years of age or older would be eligible to establish a TFSA. The only requirement will be that the individual must have a Social Insurance Number when the account is opened. There will be no limit on how many TFSAs each person can set up, keeping in mind that the allowable yearly tax-free contribution is a combined total of all of these accounts.

How would I know what my TFSA contribution room is for a given tax year?

The Canada Revenue Agency (CRA) will determine TFSA contribution room for each eligible individual who files an annual T1 individual income tax return. Individuals who have not filed returns for prior years (because for example, there was no tax payable) would be permitted to establish their entitlement to contribution room by filing a return for those years or by other means acceptable to the CRA.

If I don’t have the money to invest in a given year, would I be able to use any unused contribution room in a future year?

Yes. There will be no limit on the number of years unused contribution room could be carried forward.

How much can you contribute to a TFSA per year?

Each year you could contribute an amount up to your contribution room for the year. The TFSA contribution room will be determined by the CRA for each eligible individual who files an annual income tax return.

Your contribution room would be made up of three amounts:

First: Each year you would be allocated and allowed to contribute at least $5,000 (this annual amount will be indexed to inflation and rounded to the nearest $500 on a yearly basis).

Second: Any withdrawals made during the year would be added to the contribution room for the next year.

Third: Any unused contribution room from the previous year would be added to the contribution room for the year. For example (assuming no indexing): In 2009 you would be allocated and allowed to contribute up to $5,000. If you only contribute $2,000, an amount of $3,000 would be carried forward to 2010. Your contribution room for 2010 would then be $5,000 plus $3,000, or $8,000.