How do I make an exempt contribution to my TFSA after a spouse dies in Canada?
This answer covers Canadian federal tax law, which applies in every province.
Yes. If you are the surviving spouse or common-law partner and you received TFSA payments as a beneficiary, you can contribute them to your own TFSA as an exempt contribution that does not affect your own available contribution room. The amount must be received and contributed during the rollover period, which ends on December 31 of the year following the year of death, and the total cannot be more than the TFSA's fair market value at death.
To designate it, send Form RC240 (Designation of an Exempt Contribution – TFSA) to the CRA within 30 days of making the contribution, unless the CRA allows a later date. Starting January 1, 2026, earnings accrued after death, up to the end of the rollover period, can also be designated as exempt contributions.
There are limits. No exempt contribution is possible if the deceased's TFSA had an excess TFSA amount, or if payments are received by more than one survivor. A beneficiary who is not a survivor cannot designate any amount as exempt, and over-contributing is taxed at 1% per month while the excess remains. Check your own situation with a lawyer or accountant before you contribute.
Key takeaways
- Only a surviving spouse or common-law partner who received the TFSA payments as beneficiary can make an exempt contribution, and it does not affect your own contribution room.
- The money must be received and contributed by December 31 of the year following the year of death, and the total cannot be more than the TFSA's fair market value at death.
- Send Form RC240 to the CRA within 30 days of making the contribution, unless the CRA allows a later date.
- No exempt contribution is possible if the deceased's TFSA had an excess TFSA amount or if payments are received by more than one survivor.