# TFSA overcontribution



## Kalergie (Jan 7, 2011)

Hi. 
I recently received a letter from the TFSA contribution unit of CRA and was shocked. I have to pay 550$ tax because I supposedly overcontributed 5000$ for 11 months. My understanding was that I had 15,000$ contribution limit in 2011 but according to CRA, I only had 10,000$. As a good saver, I maxed out my limit at all times. 

I called them to clarify and told them I have lived in Canada since 2008 but became Permanent Resident in 2010. In 2009, I was working on a work permit in Canada. CRA on the phone said, I have to be a permanent resident to qualify for the TFSA contribution in that year. I am surprised by that statement. Also, why have I never received a notice of overcontribution before? I always maxed out my TFSA and therefore, should have been overcontributing every year since.

As a next step, the guy from CRA advised me to write them a letter explaining my case and wait what happens.

Any idea what I can do or say to defend my case? In the end of the day, I made a mistake by thinking I was qualified. However, this experience makes me feel very upset about the TFSA and puts me off saving in general.

Thanks


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## atrp2biz (Sep 22, 2010)

I didn't think you had to have PR status to be eligible to contribute to a TFSA. My plain reading is that you would be eligible with just a work permit.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/lgbl-eng.html


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## TaxGuy (Apr 7, 2009)

You only have to be a factual resident. You could argue that you have been a resident for tax purposes since 2008.

Send the CRA a letter requesting them to re-review the situation.


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