You may get another $1,400 coronavirus stimulus check, but from state government

You may get another $1,400 coronavirus stimulus check, but from state government
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Congress so far has sent out three rounds of stimulus checks of up to $1,200, $600 and $1,400. The debate is ongoing over the need for another round of stimulus checks, but the chances look grim. However, you may still get another coronavirus stimulus check, but from your state or local government.

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Q1 2021 hedge fund letters, conferences and more

How can state or local governments give coronavirus stimulus checks?

Earlier this week, the Treasury Department came up with new spending rules for the State and Local Coronavirus Fiscal Recovery Fund (Recovery Fund). This fund is part of the American Rescue Plan Act, which sets aside $350 billion in direct and flexible aid to states, counties, cities and tribal governments having a population of more than 50,000.

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This new guidance includes a section that says the governments can use this fund to provide direct assistance, including cash assistance, to households. The assistance, however, should only go to those facing adverse economic impacts because of the coronavirus pandemic.

“Assistance to households or populations facing negative economic impacts due to COVID-19 is also an eligible use,” the new rules say.

Further, the new rules say that in case of cash assistance, the amount should be in line with the stimulus checks sent by the federal government so far.

“Cash transfers that are grossly in excess of such amounts would be outside the scope of eligible uses under [the ARPA law] and could be subject to recoupment,” the Treasury says.

Talking about who would be eligible for the assistance, the rules say a person or household that witnessed “a negative economic impact from the pandemic.”

Providing more details, the Treasury says that those who have “experienced unemployment or increased food or housing insecurity or is low- or moderate-income experienced negative economic impacts resulting from the pandemic” should be eligible for the assistance.

Other types of assistance eligible under new rules

These rules also lay out more scenarios in which a government can give cash assistance. As per the Treasury, the assistance may also go to the “surviving family members of COVID-19 victims” or to “widows, widowers, and dependents of eligible COVID-19 victims.”

Talking about the size of the checks, the guidelines say the amount must be “reasonably proportional to the negative economic impact they are intended to address.”

Apart from cash assistance, the state or local government can also use the recovery fund to offer assistance in other ways. The government can offer food, rent, mortgage, utility and other types of assistance.

Further, the fund can also be used to support public health expenditures related to the COVID-19 pandemic. Moreover, the fund can also be directed to cover the payroll and benefit expenses of healthcare-related employees.

The Treasury says state or local governments can also utilize the funds to assist small businesses through loans and grants; provide aid to unemployed workers; job training; support local tourism, travel and hospitality; or invest in technology infrastructure.

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