Education

The scholarship is not restricted but he has a full tuition and fees scholarship already at his school so I can't apply this towards tuition for education credits off my taxes. When I go into his tax return, he does not qualify for an education credit since I am claiming him as a dependent. He has to pay taxes on it on his return, federal and state since he exceeds $1100 in income with the $3000 scholarship(that he received a 1099-MISC for). What to do?