TFSA Deadline: How Long to Make an Exempt Contribution in Canada

If you are a surviving spouse or common-law partner who received money from a deceased person's TFSA, you may be able to put it into your own TFSA without using your own contribution room. That relief comes with firm time limits.

There are really two clocks: one for getting the money into your TFSA, and one for telling the CRA about it. This article explains both, the exceptions, and what can happen if a deadline is missed.

This article covers Canadian federal tax law, which applies in every province.

The first clock: the rollover period

A survivor who receives TFSA payments as a beneficiary can contribute them to their own TFSA as an exempt contribution that does not affect their own available contribution room. To qualify, the amount must be received and contributed during the rollover period, and the total must not be more than the TFSA's fair market value at death.

The rollover period runs from the date of death to the end of the calendar year after the year of death, which means December 31 of the year following death. The end date therefore depends on the year in which the holder died.

Fair market value means the highest price, expressed in money, obtainable in an open and unrestricted market between informed, prudent parties dealing at arm's length, neither under compulsion to buy or sell.

A common-law partner is a person who is not your spouse, with whom you are living in a conjugal relationship and who meets a further condition, such as having lived with you for at least 12 continuous months or being the parent of your child.

The second clock: Form RC240

The survivor sends 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. The Income Tax Act definition of exempt contribution in s. 207.01(1) also requires designation within 30 days.

Because the 30 days start from the contribution date, a contribution made late in the rollover period leaves little time to spare, so keep the date of the transfer on record.

What is covered, and what is not

• The amount is limited to the TFSA's fair market value at death.
• Starting January 1, 2026, earnings accrued after death, up to the end of the rollover period, can be designated as exempt contributions.
• No exempt contribution is possible if payments are received by more than one survivor, or if the deceased's TFSA had an excess TFSA amount, unless in that excess case the Minister allows a greater amount.
• In Quebec, which does not recognize successor holder designations, a surviving spouse or common-law partner may contribute amounts received without affecting unused room, if contributed by December 31 of the year following death and Form RC240 is filed within 30 days.

What happens if you miss the deadline

An exempt contribution must be received and contributed during the rollover period and designated within 30 days of the contribution. If one of these deadlines is missed, the exact tax result depends on your situation, so it is worth confirming with an accountant or lawyer as early as possible.

For comparison, a non-survivor beneficiary such as a child may contribute received amounts only if they have available room and cannot designate any amount as exempt; over-contributing is taxed at 1% per month while the excess remains. For a late Form RC240, the CRA may allow a later date, but that is not automatic.

What to do next

• Write down the date of death and the rollover end date, December 31 of the following year.
• Find out the TFSA's fair market value at death, which caps the exempt amount, and whether there was an excess TFSA amount.
• Confirm that you are the only survivor receiving payments.
• Complete the transfer well before the end of the rollover period and keep the date.
• File Form RC240 within 30 days of the contribution.
• Speak to an accountant or lawyer early if you are near a deadline or unsure the rules apply.

Frequently asked questions