Since you are claiming your son, the 1098-T should not be reported on your son's return as he is not eligible for the education credit. Also, do not report the 1099-Q since this will only result in a tax liability on the full amount, because as you stated earlier it is causing a tax liability for your son and both of these forms are not required to be reported on his return.
As I stated before, the Earnings/Basis decomposition does not have anything to do with the tax liability being calculated. The 529 distribution which is shown on the 1099-Q is tax-free as long as the distribution is used for qualified educational expenses. The only reason you are provided the earnings/basis on the 1099-Q is in the event that you do have to report the distribution as income as it was not used towards qualified educational expenses or a portion of the distributions was not used towards qualified educational expenses.
Based on what you have shared, it does not appear that your son needs to file a tax return.
