Does losing a child deduction have the effect of dramatically increasing taxes owed?

[AlanT]

Yes, it could have a significant effect on your taxes. 

1. You would lose the Child Tax Credit which can reduce your tax bill by up to $2,000 per qualifying child.  
2. You would also lose Head of Household status if that is your only child.  Head of Household status gives you a bigger standard deduction and lower taxes.  

[SweetieJean]

3. Your EIC could change, since it is based in part on the number of children (up to 3 total).
4. You could lose the Child and Dependent Care Credit.