This is an unfortunate side effect of the Tax Cuts and Jobs Act. Since the Survivor Benefit plan is unearned taxable income, and can be enough to make Social Security Benefits taxable as well, all of this income is subject to the Kiddie Tax.
But, the structure of the Kiddie Tax was changed this year because of the Tax Cuts and Jobs Act. Instead of being taxable at the parent's tax rates, Kiddie Tax is assessed at Estates and Trusts rates, which reach much higher tax percentages at much lower income levels. The idea behind this change was likely to eliminate a tax shelter of higher-income individuals through their children, but your situation is an unintended consequence.
This year there might not be much you can do, because what has been reported will be taxed as you are seeing. Instead, you may want to seek the advice of a tax attorney or a financial planner to see if they can assist you further with your son's survivor benefits for future years.
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