Was I an employee or independent contractor?

You weren't. You were an employee of company A for those 14 months, not of company B. They had to pay company A for your services- making you, to company B at least, an independent contractor. Sorry. :0(

you were hired as an employee for company A, then sent to work "on contract" or as consultant to company B for the first 14 months, and were paid salary by company A (not company B) to you. company B paid company A for your services (salary plus markup) According to the IRS rules for defining an "employee", uou may not considered as an employee of company b: -you did not show up to work and leave as other employees of company - you did not get your employee annual performance report from company B - company b did not tell you how to do your work, or what tools you use - you did not file your time sheets to company b - you did not get any employee benefits and medical coverage from company b - you likely received severance from company A ADDENDUM While u may think that you were an employee of company b in the earlier period, you were not. The fact is company A hired u, and put u to work in company b. Company A could at any time could put u to work for another client, or terminate your employment. Company B didnt recognise u as an employee, and subsequently didnt give u an annual earning slip to report your taxes, until u were hired as perm employee: you probably didnt have a fixed office, didnt have ur name in front of the office space, couldnt enter the office building after the regular office hours, and didnt have your name on company b's phone book or business card. In short, u didnt have a control of space, or use of space that an employee would have.

Well, first of all, you say that for the first 14 months you were employed by company A, not company B - so how do you figure you'd get severance for that time from company B? You weren't THEIR employee. And secondly, severance isn't legally required, so be glad you're getting ANY.

For the time in question: You were an employee. You were not an independent contractor. However, you were not an employee of company B. You were an employee of company A. Severance pay is calculated based on the time that you were an employee of the company paying the severance pay. Therefore, the company's calculation was correct. The IRS rules that you mention are for determining whether you are (a) an employee of the company that paid you (company A), or (b) an independent contractor. They do not indicate whether you were an employee of any other company, except for the one that paid you. Because you were paid only by company A for those months, you were not an employee of a company B.