First determine if your son has a filing requirement. Scholarship income greater than education expenses is considered earned income to determine a filing requirement. . Once the student has a filing requirement based on that income (and assuming they don’t have unearned income from investments) only then is the scholarship amount considered unearned income. So if the scholarship income in excess of tuition and books is less than the $15,750 standard deduction he has no filing requirement and the scholarship differential can be ignored by both of you. In any case any amount that would be taxable (if he has to file because of other earnings or income) that amount would be taxed on their return not yours. If the amount is substantial Kiddie tax would apply so some of it would be taxed at your rate. But again, it’s on his return in that case, not yours.
