Q.   Should this non-qualified money be reported on our taxes?

A. No

Q.  Should he report this non-qualified money on his taxes?

A. No

 Q. Should we use the 8814 (not 8615) form on our tax forms. 

A. No. Scholarship income does not qualify to go on parent's return.

Q. Or should we fill out tax forms for just my son?

A. No. Student does not have enough income to be required to file.

You do not report his/her income on your return. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2020 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,400 (2020).
2.          Unearned income (interest, dividends, capital gains, unemployment) of more than $1100.
3.          Unearned income over $350 and gross income of more than $1100
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12,400 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC

If his only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814. 

Taxable scholarship is subject to the kiddie tax, on the student's return, using form 8615.  Although taxable scholarship is treated as unearned income for purposes of the kiddie tax, it is treated as earned income for purposes of calculating a dependent's standard deduction (earned income + $350).