Child Benefit is due to be removed from families with a higher rate taxpayer from January next year.
The IFS is warning that the cliff-edge effect of withdrawing the benefit if one parent goes above £42,475 in earnings will hit hundreds of thousands of families.
200,000 could find themselves with a lower overall income after a pay rise.
Another 170,00 could actually increase their income by taking a pay cut.
The IFS recommends a gradual withdrawal of the benefit for higher rate taxpayers.
It says one route would be to integrate it with means-tested Child Tax Credit.
Ministers have already indicated that they are looking at making the planned Child Benefit changes fairer.