Originally Posted by BristolUK

My stepdaughter hasn't received her T5 yet, although interest on a TFSA is supposed to be tax free.

Using turbotax which shows the tax refund due "so far" if she enters last year's T5 as if this year's T5, the refund figure falls.

Which kind of looks like the interest is being taxed.

I know there are situations where tax may be due on TFS and perhaps the bank issues a T5 because they may not know if those situations apply, perhaps because of paying in too much using accounts with other banks for example. But if there's only one account reported, why would the refund figure be reduced?

Perhaps if you have one TFSA and you know there are no tax issues on the interest, is it the case that you don't report it?

There is one other possibility - she qualifies for the working income tax credit and the running refund total includes this.

Might it be that the interest incurs no additional tax but as income it reduces the WITC slightly?

Originally Posted by BristolUK

My stepdaughter hasn't received her T5 yet, although interest on a TFSA is supposed to be tax free.

Using turbotax which shows the tax refund due "so far" if she enters last year's T5 as if this year's T5, the refund figure falls.

Which kind of looks like the interest is being taxed....

Originally Posted by JonboyE

Income earned in a TFSA is not taxable. The TFSA provider will not issue a T5.