Final answer:
An employee can claim exemption from withholding California income tax for one calendar year if they meet the requirements stated by the CA Franchise Tax Board. So, option 1 is correct.
Step-by-step explanation:
An employee can claim exemption from withholding California income tax for one calendar year if they meet the requirements stated by the CA Franchise Tax Board, which may include having a low-income level or being exempt from federal income tax withholding. It is important to note that each state may have different requirements for claiming exemption from state income tax withholding.
For example, in California, an employee may need to file a California Form DE 4 and meet certain conditions, such as expecting to have no tax liability for the year, having had no tax liability the previous year, or being exempt from federal income tax withholding. The employee's employer will evaluate the employee's claim and decide.
Other factors mentioned in the question, such as living in California for at least 6 months, having a valid CA driver's license, or being self-employed, may not directly impact the ability to claim exemption from withholding California income tax.