Should I Expect a Tax Slip for My TFSA?

In most cases you won't receive any tax slips for your Tax Free Savings Account. That's because contributions to a TFSA aren't tax-deductible, and any withdrawals made are tax-free. Income within your TFSA also won't generate tax slips since TFSAs allow for tax-free growth – be it from capital gains, interest and/or dividends.

Keep in mind:

1. If you moved shares in-kind from a non-registered account to your TFSA and then sold the shares, you won't receive a tax slip for your sell order because the shares were sold inside your TFSA. Any gains or losses wouldn't apply for tax purposes. You would receive a tax slip, a T5008, related to the original transfer of shares into your TFSA. Contributing securities to a registered plan may result in a deemed disposition for tax purposes. Generally, if you were to transfer shares showing a loss into your TFSA, you wouldn't be able to claim a capital loss, while if you were to transfer shares with unrealized gains, you would be responsible for paying tax on the capital gains. (It's best to consult with a professional tax advisor if you need tax advice.)
2. With a TFSA, you are required to keep track of your contributions and withdrawals. You can have more than one TFSA, but the total amount you contribute can't be more than your available contribution room. That's important since over-contributions are subject to a monthly tax of 1 per cent for each month the excess amount stays in your TFSA. You can check for updates under your account activity, on your monthly investing statement or visit the My Account section of the CRA website. (Note: The CRA data doesn't update real-time with each contribution or withdrawal. Any TFSA contributions or withdrawals you made in the prior year may not be reflected on the CRA site until after the end of February of the current year.)
3. The U.S. doesn't recognize TFSAs as registered plans. If an investor who is a dual U.S.-Canadian citizen earns dividends from U.S.-listed stocks inside a TFSA, he or she may receive a U.S. tax slip, a 1099, for U.S. tax reporting purposes. (Check out What Investments Can I Hold in My TFSA? to find out more about TFSA-eligible investments.)

Many RBC Direct Investing tax documents are available electronically. Find out more in the Investment and Tax Season Centre.

Other resources you may find helpful:

TFSAs: Frequently Asked Questions

Owning a Non-Qualified Investment Can be Costly

The information provided in this article is for general purposes only and does not constitute personal financial advice. Please consult with your own professional advisor to discuss your specific financial and tax needs.