For 2021, cash contributions to a Qualified Charity are 100% deductible up to your Adjusted Gross Income. Usually, these donations are only 60% deductible. Also, for 2021, cash contributions for disaster relief are 100% deductible. The "disaster" must be a Qualified Disaster. This means that certain domestic disasters from 2019 and 2020 such as the wildfires and some other natural disasters qualify as well as some foreign disasters for the current year. You can look up Qualified Disaster on the IRS page and follow the trail of publications like I did or go directly to publications 526 and 976.
The letter is asking you to identify the amount, if any, of your charitable contributions that were for qualified disaster relief. They decided after the fact, and still have not updated the forms or publications, that they wanted us to identify this amount on our Schedule A Line 11 "Write-in Text" section. I am assuming that the IRS decided not to update their form or publications because this was a recent addition, and it is only for this year. Turbo Tax, therefore, did not pick up this change.
How should you answer? Well, truthfully of course. Be aware that if you did make any Qualified Disaster Relief Contributions that you need special written documentation from the charity that the money was used for relief. (Pub 976, pg 7)
For myself, my charity does engage in disaster relief but I made no special donations directed to these Qualified Disasters so I will respond to this letter identifying $0 for disaster relief. This will not change my refund amount because the cash contributions I made are already 100% deductible.
My letter directs me to fax in a response with a cover sheet that includes some specific information. After my cover sheet I will send a single page with a short sentence states that $0 were for disaster relief. I will also include a copy of the letter I received as my third page in the fax. After I fax the documents I will print out a confirmation from the fax machine that my fax was received and staple it to the documents and keep it for my records. The next week I will call the phone number on the back of the letter and confirm my fax was received and my information was updated in their system.
