ParizConsulting Group

2026-10-24

Yi, 2026 TCC 176: a 50/50 parenting schedule does not by itself make a parent a 'shared-custody parent'

2026 TCC 176 · Tax Court of Canada

Provisions

ITA s. 122.6ITA s. 122.5ITA s. 122.8

Text

Author: Sas Tullo

This is an informal procedure appeal about the Canada Child Benefit, the GST/HST credit, and the Canada Carbon Rebate. The Canada Revenue Agency decided that Ms. Yi became a “shared-custody parent” when she and the children’s father moved to an equal-time schedule in 2023, which cut her benefits in half. The Tax Court allowed the appeal in full. The decision matters to separated parents because the equal-time test is only one of the statutory conditions: the parent who continues to run the children’s schooling, medical care, and daily needs during the other parent’s time may remain the sole eligible individual.

Facts

Ms. Yi and Mr. Limion separated in 2016. Under a March 2017 separation agreement she had custody and the children lived primarily with her, about 80 per cent of the time (para 3). An amending agreement in September 2023 moved the parents to a 2-2-5-5 schedule under which each had the children half the time (para 4). In May 2025 Mr. Limion applied for the CCB, and in December 2025 his application was approved retroactively to June 2024 (para 5). On December 12, 2025 the Minister issued notices of redetermination treating Ms. Yi as a shared-custody parent from October 1, 2023, which reduced her CCB, GST/HST credit, Canada Carbon Rebate, and two Ontario benefits (paras 1-2).

Ms. Yi had home-schooled both children and continued to do so on weekdays after the 50/50 schedule began, until they entered public school in April and May 2024 (paras 19-20). She managed the transition for the elder child, who has exceptional needs, paid the school expenses, enrolled both children in activities, arranged and attended medical, dental, orthodontic, and eye appointments, and texted the children daily at their father’s home about brushing their teeth (paras 21-25). Mr. Limion provided a secure home and everyday companionship, spoke with teachers, and drove the children to school and activities when they were with him, but did not arrange medical or dental appointments or register the children for activities (paras 27-29). The 2017 agreement gave Ms. Yi the important decisions about education, health care, and recreation after consulting Mr. Limion, and provided that she “shall claim all child tax benefits for the Children”; neither clause was changed in 2023 (paras 30-33).

Issues

The appeal turned on who primarily fulfilled the responsibility for the care and upbringing of the two children when they resided with Mr. Limion, since it was clear that Ms. Yi did so when they resided with her (para 7). The Court also had to decide whether the parents had agreed to allocate the GST/HST credit and the Canada Carbon Rebate to Ms. Yi (para 8).

Holding

The appeal was allowed without costs. Ms. Yi is an eligible individual under section 122.6 of the Income Tax Act in respect of both children and is not a shared-custody parent; the GST/HST credit and the Canada Carbon Rebate are allocated to her under an agreement for the purposes of paragraphs 122.5(6)(a) and 122.8(8)(a) (para 41). The Court had no jurisdiction over the Ontario Child Benefit and Ontario Trillium Benefit (para 6).

The court’s reasoning

Cook J. set out the definition of “shared-custody parent” in section 122.6, which requires that the two parents not be cohabiting spouses or common-law partners, that each reside with the child at least 40 per cent of the time in the month or on an approximately equal basis, and that each “primarily fulfil the responsibility for the care and upbringing of the qualified dependant when residing with the qualified dependant, as determined in consideration of prescribed factors” (para 9). Only paragraph (c) was in dispute; the determination is made child by child and month by month (paras 10-11). The prescribed factors in section 6302 of the Income Tax Regulations include supervision of daily activities, a secure environment, medical care, educational and recreational activities, illness and hygiene, guidance and companionship, and any court order (para 11). Following Morrissey v. The Queen, 2016 TCC 178, and Wong v. The King, 2025 TCC 24, the Court applied those factors to the shared-custody definition even though section 6302 is framed by reference to paragraph (h) of the definition of “eligible individual” (para 12).

The Court accepted that one would ordinarily expect a parent with whom a child resides to be the one primarily responsible for the child during that time, as in Wong (para 14), but agreed with Ms. Yi that this cannot be automatic, because otherwise paragraph (c) of the definition would have no work to do (para 15). Grimard v. The Queen, 2008 TCC 98, was cited for the proposition that care and upbringing “cannot be assessed quantitatively” and is not a matter of counting days (para 16).

Both parents were credible but Ms. Yi was more reliable, with a more detailed recollection and supporting documents (para 18). The Court placed particular weight on Mr. Limion’s limited role in the children’s formal education given the move to public school and the elder child’s needs (para 28). It found that, although Mr. Limion provided a secure environment and companionship, Ms. Yi supervised the children’s daily activities and needs even when they were with him and was primarily responsible for their schooling, medical, dental, and hygienic needs, and recreation, and that she had overall responsibility for the children at all times (para 35). Having had primary responsibility for six and a half years, she continued in that role after the schedule changed (para 36). The evidence did not warrant treating the two children or different months differently (para 37). It followed that neither parent was a shared-custody parent and Ms. Yi was an eligible individual entitled to the full CCB (para 38).

The separation agreement’s clause on claiming child tax benefits was irrelevant to the CCB, which depends on the facts rather than on any agreement (Perron v. The Queen, 2017 TCC 220) (para 33). It was relevant to the GST/HST credit and the Canada Carbon Rebate, because paragraphs 122.5(6)(a) and 122.8(8)(a) permit two individuals of whom a child is a qualified dependant to agree on which of them receives the amount, as discussed in Fraser v. The Queen, 2010 TCC 23, and Ross v. The Queen, 2011 TCC 515; the clause was such an agreement (para 40).

Practical implications

The decision illustrates that the shared-custody definition has three cumulative conditions and that the CRA cannot rest on the parenting schedule alone. Where one parent continues to carry the organizing load of the children’s lives during the other parent’s time, the Court may find that the other parent does not primarily fulfil the care and upbringing even in his or her own weeks, so that neither parent is a shared-custody parent and the first keeps the whole benefit. In my view the result is sound on the statutory text, though it sits uneasily with the expectation, acknowledged by the Court at paragraph 14, that time with a parent usually carries responsibility with it. The outcome will turn on documentary evidence of who arranged appointments, dealt with the school, and paid the expenses.

Two further points deserve attention. A separation agreement cannot determine CCB entitlement, but a clause allocating all child tax benefits does operate as an agreement for the GST/HST credit and the Canada Carbon Rebate under paragraphs 122.5(6)(a) and 122.8(8)(a), and drafters should distinguish the two regimes. The Tax Court also has no jurisdiction over the Ontario Child Benefit and Ontario Trillium Benefit, which must be pursued separately with the CRA. The definition of “shared-custody parent” quoted in the reasons matches the current text of section 122.6 on the Justice Laws website. Whether an appeal was taken is not verified here.

For separated parents the takeaway is simple: an equal-time schedule does not automatically split the Canada Child Benefit. The parent who keeps running the children’s schooling and health care, and can prove it, may keep the whole benefit.

This comment is general information, not legal advice. The law may have changed since the decision; check the current text in the tax wiki.

Yi v. The King, 2026 TCC 176, judgment dated October 14, 2026, Cook J. (appeal heard July 15, 2026, Oakville, informal procedure). Reasons on the Tax Court’s site. Also on CanLII.