Okay, so I went to the Registrar's office at my school today, and I had quite a long talk with the person who is in charge of determining residency at the university. She broke down a lot of it for me, and I feel compelled to share some information with you who might be in the same boat as myself.
Okay, so... starting from the beginning... There are three major categories you need to satisfy to be considered a CA resident for tuition purposes if you are coming from out of state.
1) Physical presence in the state for at least 366 days.
2) Intent to become a permanent resident of the state
3) Financial independence
Number 1 should be pretty self explanatory.
Intent gets a bit more complicated. Basically, the process for demonstrating intent is highly subjective, and it depends a great deal on the person reviewing your residency petition. The Resident Affairs assistant described it as follows: To demonstrate intent, the individual must put forth a compelling argument that they intend to stay in the state permanently, and that they are NOT just going to CA for school purposes. There is no one formula to demonstrate intent, but instead, it's more like a scale where you pile things on top of it. So if the scale reads a fairly high value, then they will be more likely to give you resident status.
Ways to prove intent are: CA driver's license, CA vehicle registration, CA bank accounts, filing taxes in CA, voter registration card, rental agreement etc. Basically, the more you can produce, the better chances you have of being able to demonstrate intent to live in the state. There is no requirement, to my knowledge, that you HAVE to file taxes, but it does help your cause.
I explained to her that I worked part time for 6 months, but I did not make enough money to actually contribute an income tax. She said she understood that, and a lot of students are in a similar situation, and that was fine.
One of the greatest misconceptions that I had when starting this thread was I thought that the state of California does not want a nonresident to benefit from the affordable education available to residents. Residents and their parents have paid tax dollars, and therefore they should reap the rewards of an affordable tuition. So I figured that I wouldn't be considered a resident unless I had contributed financially to the system. I thought by me gaining resident tuition, it was analogous to stealing, or more just benefitting from a system that I did not contribute to.
That is pretty much NOT TRUE. What the state of CA is interested in, is that you show that you PLAN ON MAKING CA YOUR PERMANENT HOME. That is the idea. Paying taxes is one of the ways you can show you want to make CA you're home, but there are tons of other ways you can demonstrate intent to live in the state permanently. The state is well aware that many students come to the state, go to school here full time, and therefore cannot have a job and pay or file taxes. So there are other ways to convince them of your intent to become a permanent resident of the state (i.e. vehicle registration, license etc)
The third component, financial independence, ONLY APPLIES TO INDIVIDUALS UNDER THE AGE OF 24. Once you turn 24 years old, you are automatically considered financially independent. If you are 22 years old, and you are trying to become a resident, then you will need to demonstrate financial independence (I believe for two years prior to your request). Financial independence means that you can show you can pay for your own living expenses without assistance from your parents out of state (so obviously, you cannot be filed as a dependent on your parents returns). Therefore, it is incredibly hard for most nonresidents under 24 to meet this requirement, but once you turn 24 it is no longer an issue.
Also, a few closing comments: Just because your university considers you to be a resident, that doesn't mean that the state of CA acknowledges you as a resident. The residence determination by your undergraduate institution is for tuition purposes. This was and still is quite confusing to me. According to the CA DMV: "Residency is established by voting in a California election, paying resident tuition, filing for a homeowner's property tax exemption, or any other privilege or benefit not ordinarily extended to nonresidents."
So based on that, I get the impression that if the university of California, or California state university allows you to pay resident tutiton, the state will consider you a resident because you are gaining a privilege not available to nonresidents. Don't quote me on any of this.
The resident affairs person also said that for graduate schools, if you are over 24 they don't even ask you prove financial independence. So that means that if you are applying to medical school for instance, they will calculate your age from your application and unless there are some complications (i.e. you have an F1 visa) you will fulfill the financial independence requirements.
I know this post probably seems similar to beating a dead horse, but I was pulling my hair out trying to get information. I just wanted to help out those who may have similar concerns as I am.