What happens if I've over contributed into my TFSA?

First thing is to make sure you actually over-contributed to your TFSA. Only deposits are considered to be contributions to your TFSA, so if you've accrued enough interest or earnings in your TFSA your account value may be over the contribution limit, but your actual contributions are not. For example, say you have the 2017 lifetime maximum of $52,000 available, so you deposited this full amount on January 1st, 2017. Say your portfolio has been performing well (woohoo!) and as a result your account balance is roughly $53,335. This is not an over contribution!

What should I do if I definitely over-contributed?

Over contributions to TFSAs are subject to a 1% penalty tax per month (only on the over-contribution amount). Our friends at the CRA have a pretty comprehensive example of how this works here.

Once you know you've over-contributed, it's best to let your TFSA provider know (hopefully us!) as quickly as possible how much you need to move out of your TFSA. If you've over contributed to a Wealthsimple TFSA there are a couple options. First, you can withdraw the necessary amount back to a linked bank account by going to the 'Withdrawals' section of your Wealthsimple profile. Your second option would be for you to email support@wealthsimple.com if you'd like the funds to be moved into a different Wealthsimple account (just make sure you have the contribution room available in that account if applicable)!

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