Here's some ideas for specials.
Side B: He smacks Tael (or is it Tatl?) just like he does in that one cutscene. This time he sends him flying out in front of him doing darkness damage to whoever touches him.
Neutral B: Tatl/Tael pyre: Both fairies circle skull kid emitting protective flames that damage opponents who are close by.
Down B: Skulkid Scream: That annoying scream >=D Electrifies any nearby enemies and stuns enemies that are further away.
Up B: Nada...
If you do this please make the protection for Down Special. Down is always the defensive move if a character has one. I would modify it this way: The fairies circle Skull Kid. it will reflect projectiles and he has Super Armor or is invincible for a short period of time. Maybe it can be a counter attack?
Up Special: On Ground it might be as the Side B NaruZeldaMaster described. If you do so you have Side B completely free for new stuff.
Side B: Advanced fairy attack. He sends two faieies which circle and hit multiple times.
Neutral B: Might be a combiation: Final Smash and Neutral Air. Skull Kid Needs a little to start the attack. It does this black aura effect Neutral Air has. The attac hits multiple times and the last hit does good knockback. The Aura is a bit bigger than the one on Neutral Air.
Except Down Special I don't have good ideas. Perhaps you can use my suggestions and change them in a way you like them.
Let's change topic:
What does Side Tilt Up and Side Tilt Down do? I know they have some Hitboxes but is there a deeper sence?