Can an Individual Issue a 1099 to Another Individual?

Yes, an individual can be required to issue a Form 1099 to another individual if the payment is made in the course of the payer’s trade or business and the payment is of a type that must be reported to the IRS. For example, an individual operating as a sole proprietor or other self‑employed business owner may have to issue Form 1099‑NEC to a nonemployee for services when the IRS reporting conditions are met.

Personal payments generally do not require Form 1099 reporting. An individual paying another individual for purely personal, nonbusiness reasons usually does not issue a Form 1099.

For nonemployee compensation, the IRS generally requires reporting when: (1) the payment is for services, (2) it is made in the course of the payer’s trade or business, (3) it is made to someone who is not the payer’s employee, and (4) the total payments to that person are at least the applicable reporting threshold for the calendar year. For payments made in calendar year 2025 (reported on 2025 Forms 1099 filed in 2026), the general federal reporting threshold for nonemployee compensation on Form 1099‑NEC and for most Form 1099‑MISC payments remains $600 or more in the aggregate for the year per payee.

Under the One Big Beautiful Bill Act (OBBBA), the federal reporting threshold for Forms 1099‑NEC and 1099‑MISC is scheduled to increase to $2,000 for payments made in calendar year 2026 and later years, with future indexing for inflation beginning in 2027. These OBBBA changes do not affect reporting of 2025 payments, so the $600 threshold continues to apply for 2025 unless and until further federal guidance is issued.

Also note that certain payments may be reportable regardless of amount (for example, payments subject to backup withholding), and that the threshold is applied to the total payments to each payee over the calendar year rather than on a per‑invoice basis.

State Law Note

State information‑return rules are administered at the state level and can differ from the federal rules above. The controlling authority is the applicable state revenue department or tax agency, which may have its own thresholds, filing formats, or additional reporting requirements.

Sources

IRS — Am I required to file a Form 1099 or other information return?

IRS — Information return reporting

IRS — Reporting payments to independent contractors

IRS — Forms and associated taxes for independent contractors

IRS — Instructions for Forms 1099‑MISC and 1099‑NEC (Rev. April 2025)

IRS — General Instructions for Certain Information Returns (2025)

IRS — IRS revises and updates Form 1099‑K frequently asked questions (Form 1099‑K thresholds only)

This information provided does not, and is not intended to, constitute legal advice.