@mamabear80 You are correct. When you abandoned your domicile in CA and established your new domicile in WA, you became a part-year resident of CA for that year.
As a part-year resident, your income during your period of CA residency is fully taxable by CA. Your W-2 income after you established your domicile in WA is taxable by CA only to the extent that you earned it by physically working in CA. Your W-2 earnings from work physically performed outside CA are not CA-source income and are not taxable by CA.
It is true that there will be a discrepancy between your CA tax return and your W-2, which may cause CA to question your return. Some taxpayers in your position choose to print and mail their state return, attaching a letter of explanation. Or you could just submit your return and wait to see if it's questioned.
Your situation is not all that unusual. Many employers are slow to update their employee's state withholding after a move. I've seen numerous questions like yours on the TurboTax forum. But the W-2 wages of a CA non-resident working entirely outside the state of CA are not subject to CA withholding nor to CA income taxation.
CA Publication 1031, which you cited, is the correct source of CA's rules on your situation.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
