Trying to add my son's 1098-T, when I enter the information, the system tells me my dependent needs to file their own tax refund. Why? He is my dependent with no income.

When box 5 of the 1098-T exceeds box 1, TurboTax will treat the difference as taxable income (to go on the student's return, not the parent's)  unless you enter offsetting information. 

If that is his only income, he does need to file unless the taxable amount is more than $12,400. Taxable scholarship is unearned income for purposes of the kiddie tax, but earned income for purposes of the dependent standard deduction calculation.

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Normally, if box 5 is more than box 1, there is no need for the parent to enter it on their return either, because they probably don't qualify for a tuition credit or deduction. 

 But, there is a tax “loop hole” available. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.

Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, she would only need to report $5000 of taxable scholarship income.