Treasury launches emergency funding relief for state and local governments (COVID-19)

Details as to how the Coronavirus State and Local Fiscal Recovery Funds can be used by state and local governments

Treasury announced the launch of a program for $350 billion in emergency funding

The U.S. Treasury Department today announced the launch of a program for $350 billion in emergency funding for state, local, territorial, and tribal governments—funding established by the “American Rescue Plan Act of 2021” to provide relief to eligible state and local governments from the economic effects of the coronavirus (COVID-19) pandemic.

Treasury also released details as to how the Coronavirus State and Local Fiscal Recovery Funds can be used by state and local governments to respond to COVID-19 local needs, to address revenue shortfalls, and to support communities and populations affected by the COVID-19 crisis.

Today’s Treasury release states that eligible state, territorial, metropolitan city, county, and tribal governments will be able to access funding directly from the Treasury Department to assist communities as they recover from the pandemic.  

  • Read a fact sheet [PDF 239 KB] for an overview of the program and a list of eligible uses.
  • Read the full list [PDF 538 KB] for additional details on the state, local, territorial, and tribal government allocations.

The Coronavirus State and Local Fiscal Recovery Funds are intended to provide flexibility for each jurisdiction to meet local needs. Within the categories of eligible uses, recipients are allowed to decide how best to use this funding to meet the needs of their communities. For instance, recipients can use funds to:

  • Support public health expenditures by (among other uses) funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, mental health and substance misuse treatment, and certain public health and safety personnel responding to the pandemic
  • Address negative economic impacts caused by the public health emergency such as by rehiring public sector workers; providing aid to households facing food, housing or other financial insecurity; offering small business assistance; and extending support for certain industries
  • Aid communities and populations by supporting an equitable recovery not only by addressing the immediate harms of the pandemic, but also the exacerbation of longstanding public health, economic, and educational disparities
  • Provide premium pay for essential workers by offering additional support to those who face the greatest health risks because of their service during the pandemic
  • Invest in water, sewer, and broadband infrastructure by improving access to clean drinking water, supporting vital wastewater and stormwater infrastructure, and expanding access to broadband internet

For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 |

Preston Quesenberry | +1 202 533 3985 |



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