I just saw this and decided to butt in.
My overall take is
a) generally, if you promise to produce goods or perform a service in return for the money, then you are self-employed (whether or not you also provide premiums to sponsors.) In this case, he promised to make a movie, therefore he is self employed.
b) however, one of the definitions of self-employment is that you are "engaged in an ongoing trade or business." For example, someone who advertises as a wedding photographer and does it routinely is involved in an ongoing trade or business. Someone who helps shoot a friends' wedding one time, is probably not engaged in an ongoing trade or business, even if they got paid that one time.
c) if you are engaged in an ongoing trade or business, you report the income on schedule C and you can deduct your business-related expenses.
d) if you are not engaged in an ongoing trade or business, you report misc other income, but you can't deduct expenses.
Because this was an educational activity, I think you have a good argument that, even though filmmaking is a business and your son promised to provide goods or services, you can treat this as other income instead of self-employment income, if that's what you prefer. On the other hand, I don't think the IRS would object if it were reported as self-employment. You can prepare a self-employment return for free using the FreeFile version of Turbotax as long as his total income is less than $36,000.
Whether you pay more kiddie tax on the gross as misc other income, or pay more SE tax on the net schedule C income, is something you would have to test.
The FreeFile version of Turbotax is available for taxpayers with income up to $36,000 and military taxpayers with income up to $69,000, and includes all forms that are normally an upgrade charge in regular Turbotax. To use the FreeFile version, you must log into the FreeFile site and make a new account, you can't use your regular Turbotax account. (If your browser automatically logs you into the regular Turbotax site, you may need to clear your browser history then try again.)
https://freefile.intuit.com
