What is considered as contemporary literature and why?
I would have said that everything written after ca. 1940 could be called contemporary. Now someone told me you can even consider Schiller's works as contemporary. So what makes a text contemporary?
The postmodern era is generally considered to have begun around 1940 or just after World War II. So, anything after this general time period is considered from the postmodern era. But strictly going by the definition of contemporary, a work written in the last 20 years is, temporally, more contemporary than one written in 1946. For example, House of Leaves was written in 2000; therefore, it is more contemporary than To Kill a Mockingbird which was written in 1960. But House of Leaves is also more contemporary, or I should say "more postmodern" than To Kill a Mockingbird in terms of style.
Postmodern literature is characterized by things like fragmentation, unreliable narrators, pastiche, stream of consciousness, bricolage, shifting narration, non-linear presentation, play and uncertainty in language, and also historically postmodern content such as things dealing with the age of computers, cell phones, globalization, etc.
Some work or some writer could be considered contemporary if it shares stylistic, artistic, or thematic qualities with what is going on now. Scholars do remark upon writers from centuries ago who seem contemporary. Schiller wrote about alienation, composed some poetry in blank verse, and he wrote about art as "play" which became a central theme in postmodern criticism. In On the Aesthetic Education of Man Schiller talks about the potential for art to help the individual realize his human totality and for society to achieve political advancement. And this would be done by recognizing the freedom (from institutional discourses) of art as well as achieving a wholeness; Schiller saw, in his "modern" world, an increase in specialization and alienation. These two effects are common postmodern themes and they can be found as themes in subsequent works by Marx, Freud and Nietzsche.
Artistic movements and historical eras overlap (postmodernism and the postmodern era) but there will always be times when you can find similar styles or even similar philosophical arguments in past works of art. It seems like a stretch of the term "contemporary" but in this case, it doesn't mean "from the same time." It just means there are ideological or stylistic similarities. For example, Tristram Shandy, by Laurence Sterne, is often cited as a forerunner of postmodern narrative styles. It was written in the middle of the 18th century.