Our 9 year old son received inheritance in the form of cash payout from an IRA. What do we do with the 1009-R? Is it earned or unearned income? Does he file a return?

[apshaffer]

There is a taxable amount on  the 1099-R, but the 'taxable amount not determined' box is also checked.  

[dmertz]

This goes on your son's tax return.  It is unearned income and, depending on the amount, might be subject to taxation at your tax rate (kiddie tax).  Unless the decedent had basis in nondeductible traditional IRA contributions, the entire gross amount is taxable.