2017-0731541E5 TFSA contributions

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Is an employer permitted to make a payment to an employee’s tax-free saving account (“TFSA”) where the payment is made at the employee’s direction?

Position: Yes.

Reasons: The payments to the TFSA are contributions of the employee.

Author: Doiron, Wayne
Section: 146.2(2)(c)

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                                                                                                                                                           W. Doiron
August 20, 2018


Re:  Contributions to tax-free savings accounts

This is in reply to your email of November 8, 2017 regarding contributions to tax-free savings accounts (“TFSAs”). We apologize for the delay in our response.

You ask for confirmation that a payment made by an employer directly to an employee’s TFSA does not contravene the condition in paragraph 146.2(2)(c) (footnote 1) that prohibits anyone other than the holder from making contributions to the TFSA. The scenario you describe does not involve a group TFSA arrangement. Rather, it is simply a case where an employee has an enforceable right to receive an amount from their employer (for example, as remuneration for services rendered), but directs the employer to make the payment to their TFSA instead.

Our comments

This technical interpretation provides general comments about the provisions of the Income Tax Act and related legislation (where referenced).  It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination.  The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R7, Advance Income Tax Rulings and Technical Interpretations.

It is our view that the payment in this scenario constitutes a contribution made to the TFSA by the holder of the TFSA and therefore complies with the requirement in paragraph 146.2(2)(c). The reporting and withholding requirements of the Act would apply if the payment constitutes income from employment.

We trust our comments will be of assistance.

Yours truly,


Dave Wurtele
Acting Section Manager
for Division Director
Financial Industries and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch


Note to reader:  Because of our system requirements, the footnotes contained in the original document are shown below instead:

1  Unless otherwise stated, all statutory references in this letter are references to the provisions of the Income Tax Act (the “Act”).

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