If the 529 disbursements were made directly to the school, yes, your son would report the 1099-Qs in his return (if he is required to file a return).
If your son is a dependent on your return, click this link for info on Dependent Filing Requirements.
New York's 529 site says, "If a college issues a refund of room and board charges, tuition or other fees paid for with 529 plan funds, you can return the money to your 529 plan to avoid having to pay taxes or a tax penalty on the refund."
You can still report your contributions on your return.
This does not create a taxable event for the grandparents.
Click this link for more info on 529 Tuition Reimbursements.
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