This 1% penalty per month applies until the excess amount is withdrawn or when your updated contribution room allows you to hold this amount in your TFSA.
To learn more about TFSA contribution room, consult the Canada Revenue Agency website.
Am I penalized if I exceed my TFSA contribution room?
Yes. You will be taxed 1% starting on the month when you record an excess amount and for each month that this amount remains in your account.
