The child tax credit lets you reduce your tax bill by as much as $1,000 for each child you have. Unlike the personal exemption, though, not all taxpayers qualify for the child tax credit. Joint-filing taxpayers making more than $110,000 or singles making more than $75,000 may have all or part of the credit phased out.
Other tax credits may also apply, depending on other factors. For instance, the Earned Income Tax Credit expands to cover wider income ranges for people with children than for those who aren't parents. In addition, if you incur child-care expenses as a new parent, you may qualify for the Child Care Tax Credit, which gives you tax savings on a portion of what you have to spend on day care or similar expenses.
If you adopted your child, there are substantial adoption-related credits available, with the maximum amount for 2012 currently set at $12,650. These credits are vital for many families in offsetting the huge expenses involved in most adoptions, and they don't start to phase out until taxpayers hit about the $190,000 mark in adjusted gross income.