Are you in the military? The withholding exemption you quoted is for active duty military.
If you are NOT military, then as long as you're an Illinois resident, ALL your income will be taxable by Illinois, regardless of your employer's location. If you're a W-2 employee, the income you earn from work carried out in Illinois will NOT be taxable by California.
As soon as you become a California resident, ALL your income will become taxable by California. You will become a California resident on the day you begin living there with the intent of making it your new main home.
You should plan your tax withholdings accordingly.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
