Registered Account Limits 2026 Cheat Sheet

TFSA contribution room accumulates when:

• The account holder is a Canadian resident aged 18 or older (room starts in the calendar year the holder turns 18)
• Room from prior years carries forward indefinitely
• Withdrawals from a TFSA create new room - but the new room is only restored on January 1 of the following calendar year (not immediately)

Exam traps:

• A non-resident who contributes to a TFSA is subject to a 1% per month penalty tax on contributions made while non-resident. The account does not accumulate room during non-residency periods.
• Over-contribution (above total available room) triggers a 1% per month penalty tax on the excess until removed.
• US-sourced dividends in a TFSA are subject to 15% US withholding; no foreign tax credit is available because TFSA income is not subject to Canadian tax.
• A TFSA does not expire and does not have a mandatory deregistration age (unlike an RRSP at age 71).

Deregistration options at age 71:

1. Convert to a RRIF (most common)
2. Purchase a registered annuity
3. Take a lump-sum withdrawal (fully taxable as income in that year)

Spousal RRSP:

Contributions are made by the higher-income spouse but placed in the lower-income spouse's RRSP. The contributing spouse claims the deduction. On withdrawal, income is attributed back to the contributor if withdrawn within 3 calendar years of the last contribution (ITA s.146(8.3)). After the 3-year period, income is reported by the annuitant (plan holder).

Earned income definition for RRSP:

Employment income (net of deductions), business income, net rental income, alimony received, disability payments. Does NOT include investment income (interest, dividends, capital gains), pension income, or CPP/OAS. Self-employed individuals include their net business income. The prior-year Notice of Assessment from CRA shows the exact RRSP deduction limit for the current year.

How the FHSA works:

• Contributions are tax-deductible (like an RRSP)
• Qualifying withdrawals for a first home purchase are tax-free (like a TFSA)
• Investment growth inside is tax-free
• Eligible if you are a Canadian resident, at least 18, have a valid SIN, and have not owned a qualifying home in the current year or in any of the prior 4 calendar years
• If unused, must close by December 31 of the 15th year after opening, or when holder turns 71, whichever is earlier; unused funds transfer to RRSP/RRIF tax-free (no RRSP room used)

Key RESP rules:

• CESG is earned until age 17, with restrictions: for children who turn 16 or 17 in the year, CESG is only available if a minimum of $2,000 has been contributed before the end of the calendar year the child turned 15, or $100/year contributed in any 4 prior years
• RESP contributions are not tax-deductible; growth is tax-sheltered; Educational Assistance Payments (EAPs) to the student include the grant and growth - taxed in the student's hands (usually at a low rate)
• If the beneficiary does not attend post-secondary: CESG must be repaid to the government; the subscriber gets back contributions tax-free; accumulated income can be rolled into an RRSP (up to $50,000 if RRSP room exists) or taken as taxable income plus a 20% surtax
• Family plans allow multiple beneficiaries; individual plans are for one beneficiary

RDSP key rules:

• Lifetime contribution limit: $200,000 (no annual limit)
• Contributions are not tax-deductible; growth is tax-sheltered
• Payments to beneficiary (Disability Assistance Payments) are partially taxable
• 10-year repayment rules: for each $1 withdrawn, $3 of the grants and bonds paid in the preceding 10 years must be repaid (up to the assistance holdback amount); closing the plan requires repayment of the full holdback amount
• Contributions can be made until the end of the year the beneficiary turns 59; grants and bonds are paid until the year the beneficiary turns 49
• Eligible if approved for the DTC; if DTC approval is lost before age 60, closing the plan or withdrawing triggers repayment of grants and bonds