Government Announces Increase to Annual Contribution Limit for Tax-Free Savings Accounts

November 26, 2012

For Immediate Release

November 26, 2012

Government Announces Increase to Annual Contribution Limit for Tax-Free Savings Accounts

Ottawa, ON – The Honourable Ted Menzies, Minister of State (Finance), and the Honourable Gail Shea, Minister of National Revenue, announced that starting in 2013, Canadians will be able to save an additional $500 in their Tax-Free Savings Account (TFSA), raising the annual contribution limit to $5,500.

TFSA’s allow Canadians to earn tax-free investment income on contributions of up to $5,000. Since TFSAs were made available in 2009 approximately 8.2 million Canadians have opened an account and roughly 2.5 million Canadians contributed the maximum amount in 2011.

“Tax-Free Savings Accounts have become a very popular way for Canadians to save on taxes and keep more of their hard-earned money,” said Larry Miller, MP for Bruce-Grey-Owen Sound. “I am very pleased that the Government has increased the contribution limit on this important tax saving vehicle.”

When the TFSA was introduced, the Government announced that the $5,000 annual contribution limit would be indexed to inflation in $500 increments. 2013 will be the year in which the first $500 increment takes effect.

For more information on the Tax-Free Savings Account, please visit; http://www.cra-arc.gc.ca/tfsa/.

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