1. The $6,000 distribution from your Roth IRA will not add to taxable income because it is a distribution of contribution basis, determined on Part III of Form 8606. Whether or not you should have taxes withhold depends on whether or not your tax withholding from other sources is sufficient to cover your tax liability from your taxable income. On your tax return, tax withholding is applied to your overall tax liability, not to any particular income item. If you don't need to generate additional tax withholding, you can request that no taxes be withheld. The options are generally 0%, 10%, or more than 10%.
2. Early distribution is the correct selection. The distribution will not be subject to the 10% penalty because only taxable distributions are subject to this penalty.
3. This has no effect on your state tax returns. Because the distribution is not included in federal taxable income, it won't be included in your state (California) taxable income.
