Is your income, so high that it makes you ineligible for the tuition credit ( $90K Single or Head of Household, $180K Married filing Jointly). If not, there is a way to claim a tuition credit (unless his scholarship is restricted).
You say "BUT, if parent reports it instead of child, it lowers taxable income on child, and adding a $300 refund".
You're not allowed to report his taxable scholarship on your return. He must report it on his return. You are allowed to report the box 1 tuition (1098-T) plus any book and computer expenses, on your return to claim the tuition credit.
There is a tax “loop hole” available. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.
Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.
Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, she would only need to report $5000 of taxable scholarship income, instead of $6000.
