If your dependent child received a Form 1099-R, and has unearned income of more than $1,050, your child must file his or her own tax return. (Which you would file on his/her behalf, of course.) If the child's income is below the filing threshold, no return is due, and the income does not get reported.
With the sole exception of the so-called Kiddie Tax on children's investment income, you never include your dependent's income on your tax return.