According to sources for E!, the actress and reality TV personality have been seeing each other and using Skype to continue their relationship while he appears on Idol and she films Breaking Dawn in Canada.
The pair's first meeting was caught on video during an Idol shoot, as Reed praised McDonald as "amazing".
McDonald did not recognise Reed from her films and asked: "Was she a famous actress or something? I'd hang out with her!"
Singer McDonald is still in the running on the current season of Idol along with Lauren Alaina, Casey Abrams, James Durbin, Jacob Lusk, Haley Reinhart, Stefano Langone, and Scotty McCreery.
Reed will reprise the role of Rosalie Hale next in The Twilight Saga: Breaking Dawn.
Breaking Dawn is split into two movies, with the first premiering on November 18 and the second part opening in cinemas on November 16, 2012.
View the video of Nikki Reed and Paul McDonald's first meeting below: