You may withdraw money from your TFSA at any time. Since there is no tax deduction when you contribute to your TFSA, the money you withdraw is not taxable.
Note that any withdrawal will increase your contribution room starting January 1st of the following year. The following example will help you understand how TFSA contributions, overseen by the Canada Revenue Agency, work.
In 2023, Chloé withdrew $9,000 from her TFSA.
On January 1, 2024, she can contribute $16,000. This amount includes the:
- $9,000 she withdrew in 2023;
- plus $7,000 in new annual contribution room for 2024.
