It's better that the money go to reduce or eliminate his debt than not be used at all.
Your bf should claim his child. He should also claim you, if he qualifies to do so. You can still be his dependent (Qualifying relative in IRS parlance, even though you do not have to actually be related), if not a Qualifying Child, if you meets the 6 tests for claiming a dependent:
1. Closely Related OR live with him ALL year
2. Your gross taxable income for the year must be less than $3,950 (2014)
3. He must have provided more than 1/2 you support
4. You must be a US citizen or resident of the US, Canada or Mexico
5. You must not file a joint return with your spouse or be claiming a dependent of your own
6. You must not be the qualifying child of another taxpayer (like your parent)
