From the instructions for form W-4:
Exemption from withholding.
You may claim exemption from withholding for 2018 if both of the following apply.
• For 2017 you had a right to a refund of all federal income tax withheld because you had no tax liability, and
• For 2018 you expect a refund of all
federal income tax withheld because you
expect to have no tax liability
"Having a tax liability" is after all credits, including refundable credits like the Earned Income Credit and Child Tax Credit.
A single person with $40K income and no kids is extremely unlikely to be exempt.