Yes, you enter $1 in Box 1 (rather than 0) in order to e-file. It will not materially affect your tax return.
For the Box 12 Code II, simply select code II- Medicaid waiver payments excluded from gross income under Notice 2014-7 in the Box 12 code area, and input the amount from your W-2 into the Box 12- Amount Column.
You can find detailed support on this topic here: How do I enter my tax-exempt Medicaid Waiver payments from IHSS in TurboTax?
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