Q. About the credit, I can still claim the nonrefundable part even if my earned income was less than one-half of my support (my W-2 wages), right?
A. Right. And in that case, the refundable part also becomes non-refundable. That is, if you have enough tax liability, you can still get the full $2500 AOTC.
Claiming the non-refundable credit is not a red flag item. Adding your hobby income under "activity not engaged in for-profit" always has some red flag potential, but is low risk unless somebody sent you a 1099.
