If your kid is aged under 23 and they are in college for more than 5 months in a year, then unless they provide more than half of their own support, their unearned income (above a low threshold) is taxed at the parents’ marginal rate (referred to colloquially as “kiddie tax”). That includes 529 money (though taxable scholarships are treated slightly differently, since for those you get to use your full personal allowance first).
As a result, instead of being taxed at 0-10% federal rates (as might be expected for a low income young person), they may be taxed at 28% or higher on the 529 earnings.