What happens to my TFSA contribution room when I make a withdrawal?

When you make a withdrawal from a TFSA, the amount of the withdrawal is added to your available contribution room the next calendar year on January 1st.

For example, say you contributed the maximum amount to your TFSA every year after you turned 18 until 2016. Then in March 2016 you decided to withdrawal $10,000. The normal annual contribution maximum would have been $5,500 in 2017, but because you withdrew funds in 2016 your actual contribution room for 2017 would be $15,500 ($5,500 + $10,000)!

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