If your son is eligible for the American Opportunity Tax credit and your income allows it, you can claim it on your tax return. You can use $4,000 of his tuition to claim $2,500 of AOTC.
That would leave $26,000 of tuition to cover the $25,000 distribution of the 529 plan. He doesn't need to report form 1099-Q on his tax return as it is not taxable.
You do not report your son's income on your tax return. With $200 in wages, he's not required to file a tax return.
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