I apologize, I needed to ask a couple of more questions and posted to soon.
You say this person is not your employee. Exactly what type of services does she provide for you and to what degree do you control the work she does?
Here is what the IRS says about a household employee:
You have a household employee if you hired someone to do household work and that worker is your employee. The worker is your employee if you can control not only what work is done, but how it is done. If the worker is your employee, it does not matter whether the work is full time or part time or that you hired the worker through an agency or from a list provided by an agency or association. It also does not matter whether you pay the worker on an hourly, daily, or weekly basis, or by the job.
Does your worker fit the description of a household employee?
Just to give you an example here -- if you hired someone to clean your house and she comes once a week, works her own schedule, provides her own cleaning supplies and even possilby hires her own helpers, then this person is not an employee.
If the person you hired is a babysitter, she more than likely fits the description of an employee because you would obviously control the work she does and the way she does it.
Edited by Merlo on 2/1/2010 at 2:15 AM EST