You are right. You do not enter your child's 1099 forms in your tax return. If you are reporting your child's interest and dividend income on your tax return you enter the child's income in the "Child's income" topic.
But how did the 1099 form get imported into TurboTax? Did they come from the child's account or from your account? Whose Social Security number is on the 1099 forms from the financial institution? If it's your Social Security number then it's your income, not the child's income.
If it is the child's income, the only advantage of reporting the income on the parent's return is that it's less paperwork. It will not save any tax, and in many cases you could end up paying more tax overall than if you file a separate return for the child. So the safest course is to file a separate return for each child. You will probably be better off that way, and certainly no worse off.
If you use TurboTax Online you can use the Free Edition for the child's return. You need a separate user ID for each return. If you use the CD or download TurboTax software, there is no extra charge to prepare additional returns.
