If he is your dependent, only you can claim the education credit. He can file his own to return to reclaim tax withheld, but if you provided more than half of his living expenses in 2016, then he is your dependent.
The 1099-Q income is tax exempt if used for his qualified education expenses, so he would need to report the income only if he used it to pay for room and board. The only reason for you to report it is to prove that he was attending school full-time, and therefore you have reason to claim his books and supplies. If you didn't get a 1098-T, then you can report that, because his school qualified for an exception to the reporting requirement.
