Can an Individual Issue a 1099 to Another Individual? Here’s What You Need to Know

If you’ve ever paid someone for freelance work, contract services, or a one-time gig, you may be wondering: Can an individual issue a 1099 to another individual? The answer isn’t a simple yes or no—it depends on the context of the payment and how you’re using the form.

In this blog post, we’ll break down when it’s appropriate, how to issue a 1099 as an individual, and what both parties should know about their IRS obligations.

Quick Answer:

Yes, an individual can issue a 1099-NEC to another individual, but only under specific conditions. The key factor is whether you’re acting in a business capacity when you made the payment.

What Is a 1099 Form?

The 1099-NEC (Nonemployee Compensation) is an IRS form used to report payments of $600 or more made to independent contractors, freelancers, or self-employed individuals for services in the course of a trade or business.

🔍 1099-NEC replaced the 1099-MISC for reporting contractor payments starting in tax year 2020.

Can a Private Individual File a 1099?

Let’s break this down:

Yes, If You Paid as a Business or for Business-Related Work

If you’re self-employed, a sole proprietor, or running a side hustle, and you hired someone (e.g., a graphic designer, website developer, virtual assistant), you’re considered a business entity in the eyes of the IRS—even if you’re just an individual.

In this case, you are responsible for issuing a 1099-NEC if:

• You paid $600 or more during the year
• The recipient is not an employee (i.e., they’re a contractor)
• The recipient is an individual or unincorporated business

No, If It Was a Personal Payment

If the payment was for personal services, like:

• Babysitting
• Lawn care
• Housekeeping
• Dog walking
• Handyman work for your home

… then you do not need to issue a 1099. The IRS only requires 1099s for business-related payments, not personal ones.

How to Issue a 1099-NEC as an Individual

Here’s a step-by-step guide:

1. Collect a W-9 Form

Before paying someone for business services, ask them to fill out IRS Form W-9 to gather their:

• Legal name
• Address
• Social Security Number (SSN) or Employer Identification Number (EIN)

2. Fill Out the 1099-NEC

• Report the total payment amount in Box 1
• Include the recipient’s info (from the W-9)
• Add your own info as the payer

3. Submit to the IRS and the Contractor

• Send Copy B to the recipient by January 31
• Submit Copy A to the IRS, either by mail or e-file, also by January 31

You can file online through:

• IRS FIRE system
• Third-party tools like Tax1099, Track1099, or TurboTax

Examples: When You Should or Shouldn’t Issue a 1099

Scenario	Should You Issue a 1099?
You paid a handyman to fix your home faucet	❌ No – personal expense
You hired a freelance writer for your blog	✅ Yes – business expense
You paid a tutor for your child at home	❌ No – personal expense
You paid a video editor for your YouTube brand	✅ Yes – business expense

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Penalties for Not Issuing a 1099

Failing to file required 1099s can result in:

• Penalties ranging from $60 to $310 per form, depending on how late it is
• Additional IRS scrutiny if you claim deductions without proper reporting

What If You’re the One Receiving the Payment?

If you’re a contractor or freelancer receiving payments from individuals acting in a business capacity, and you earn $600 or more, you must report the income on your tax return, even if the payer fails to send you a 1099.

Final Thoughts

So, can an individual issue a 1099 to another individual? Yes—but only if the payment was made in connection with a business activity. For personal payments, you’re off the hook.

Always keep proper records, use a W-9 before paying for services, and issue 1099s when required. This not only ensures IRS compliance but also strengthens your legitimacy as a business operator—even if you’re a one-person operation.