AOC and refundable portion

[JG EA]

TTB 12-3 On the refundable part of the AOC:

Refundable portion. 40% of the American Opportunity credit is
refundable for most taxpayers. Exception: Taxpayers under age 24
cannot claim any part of the credit as refundable if the following
conditions apply to them.
1) The taxpayer is:
a) Under age 18 at the end of the tax year, or
b) Age 18 at the end of the tax year and had earned income
of less than one-half of his or her support, or
c) A full-time student over age 18 and under age 24 at the end
of the tax year with earned income of less than one-half of
his or her support.
2) At least one of the taxpayer’s parents was alive at the end of
the tax year.
3) The taxpayer is filing as single, head of household, qualifying
widow(er), or married filing separately for the tax year.

Could someone explain this to me.
So, a student age 22 who can't be claimed as a dependent because of investment income belonging to the student but little earned income cannot take the refundable credit?
Or a student age 23 who has one parent alive can't claim it?
Or a student age 21 who is single can't claim the credit?

I'm not understanding this and 2011 pub 970 isn't out yet? I don't see this in 2010, but I'm not very good at reading books on line.
___________________________
I just found it in the pub. It adds an important line:
"You do not qualify for a refund if items 1 (a, b, or c), 2,
. and 3 below apply to you."
So, all would have to apply right? But that still leaves out the investment income student doesn't it?

[dtlee]

So, a student age 22 who can't be claimed as a dependent because of investment income belonging to the student but little earned income cannot take the refundable credit?

True if there is also at least one living parent and the student is filing as single, head of household, qualifying widow(er), or married filing separately.

Or a student age 23 who has one parent alive can't claim it?

True if the student also had earned income that was less than one-half of support and the student is filing as single, head of household, qualifying widow(er), or married filing separately.

Or a student age 21 who is single can't claim the credit?

True if there is also at least one living parent and if the student's earned income was less than one-half of support.

Students who meet these three criteria could be subject to the Kiddie Tax which is the rule for excluding this student from the refundable portion.

[Gary2]

So, a student age 22 who can't be claimed as a dependent because of investment income belonging to the student but little earned income cannot take the refundable credit?

Having investment income doesn't disqualify the student as a dependent. Spending it on support is what causes the disqualification as a dependent.

[JG EA]

True if there is also at least one living parent and the student is filing as single, head of household, qualifying widow(er), or married filing separately.True if the student also had earned income that was less than one-half of support and the student is filing as single, head of household, qualifying widow(er), or married filing separately.True if there is also at least one living parent and if the student's earned income was less than one-half of support.

Students who meet these three criteria could be subject to the Kiddie Tax which is the rule for excluding this student from the refundable portion.

Thanks and for tying it into the kiddie tax. That makes it more understandable.

Having investment income doesn't disqualify the student as a dependent. Spending it on support is what causes the disqualification as a dependent.

That I did know.