The 1099-Misc income is unearned income. A dependent's standard deduction is his earned income + $350; in your case 2300 + 350 = 2650.
If you got the 1099-Misc for working, you will have to report it as self employment to get it to be treated as earned income and that will mean about $495 in self employment tax (FICA - social security and medicare tax). You'll get the bigger standard deduction, so the income tax (including any "kiddie tax') will be wiped out.
