The CRA will send an educational letter or a notice of assessment (NOA) to Canadians have over contributed to their TFSA. You will also receive a notice of assessment if you made contributions to your TFSA while you were not a resident of Canada.

Educational letter

The educational letter provides information on the over contribution and its impact on your TFSA contribution room.

If you receive an educational letter and you have already removed the excess TFSA amount, you do not have to do anything else. If you have not removed the excess, it should be removed immediately.

For information on your current year limit as of January 1, go to My Account or complete Form RC343, Worksheet - TFSA contribution room, if you have contributed to your TFSA in the current year.

Notice of Assessment

The notice of assessment (NOA) provides a detailed calculation of the excess tax amount. It will show you when the excess arose, and the length of time it stayed in the account. Your NOA includes the date we processed your excess tax assessment, and the details about how much you may owe, including any applicable penalties and interest. If applicable, the NOA will also provide a detailed calculation of the tax owing for contributions you made to your TFSA while you were not a resident of Canada.

What to do if you disagree with your assessment

If you disagree with your assessment, you can make a formal objection by sending a filled out Form T400A, Notice of Objection – Income Tax Act, or a signed letter to the Chief of Appeals at your tax services office or tax centre within 90 days of the date of the notice of assessment or notice of reassessment. However, we strongly recommend that you first contact us and send in a request for a waiver or cancellation of the TFSA tax.

For more information, see Pamphlet P148, Resolving your Dispute: Objections and Appeal Rights under the Income Tax Act.

How to request a waiver or cancellation of the TFSA taxes

We can waive or cancel all or part of the taxes if we determine it is fair to do so after reviewing all factors, including whether:

• the tax arose because of a reasonable error
• the extent to which the transaction or series of transactions that gave rise to the tax also gave rise to another tax under the Income Tax Act
• the extent to which payments have been made from the person’s TFSA

The waiver is limited to tax paid under Part XI.01 and not taxes paid under any other Part of the Income Tax Act.

To consider your request, we need a letter that explains why the tax liability arose, and why it would be fair to cancel or waive all or part of the tax. Your request can be sent to one of the following addresses. You can also submit your request using the "Submit documents" service in My Account.

TFSA Processing Unit
Canada Revenue Agency
Sudbury Tax Centre
Post Office Box 20000, Station A
Sudbury ON P3A 5C1

Or

TFSA Processing Unit
Canada Revenue Agency
Winnipeg Tax Centre
Post Office Box 14000, Station Main
Winnipeg MB R3C 3M2

What to do if you disagree with our decision

If you disagree with our decision of your request for a waiver or cancellation of your TFSA tax payable, you can submit a request for a second review at the address shown above or through the "Submit Documents" service in My Account.

If you still disagree, with our decision after the second review, you can apply to the Federal Court for a judicial review within 30 days of the date of the decision letter.

For more information on the judicial review process and how to apply, please visit the Courts Adminitration Service website at www.cas-satj.gc.ca or contact your local Federal Court Registry office.

Forms and publications

• Form RC243, Tax-Free Savings Account (TFSA) Return
• Form RC243-SCH-A, Schedule A – Excess TFSA Amounts
• Form RC243-SCH-B, Schedule B – Non-Resident Contributions to a Tax-Free Savings Account (TFSA)
• Form RC343, Worksheet - TFSA contribution room
• T400A, Notice of Objection – Income Tax Act
• Pamphlet P148, Resolving your Dispute: Objections and Appeal Rights under the Income Tax Act