The essence, content and stages of formation of budgetary federalism in Ukraine in the conditions of the current normative legal and legislative support are revealed in the article. The provisions of the Concept of reforming local selfgovernment and territorial organization of government from April 1, 2014, the State Strategy for Regional Development for the period up to 2020 from August 6, 2014, the Sustainable Development Strategy "Ukraine 2020" from January 15, 2015, the Fundamental Policy Areas for 2018-2020 years from June 2017 on defining the components and parameters of the formation of budgetary federalism in Ukraine as a sovereign, independent and unitary state. Initial provisions are considered in detail. The results of the state-legal experiment of local self-government development in Irpin, Bucha, Vorzel, Gostomel, Kotsyubynske, Kyiv Oblast were conducted from April 5, 2001 to April 5, 2005. Special attention is paid to consideration of methodological developments of Ukrainian scientists, taking into account foreign experience in the mechanism of budgetary federalism implementation in the context of human development. The budgets of the Lugansk and Donetsk regions were analyzed “before” and “in the conditions” of the public-military conflict in the Ukrainian Donbass and the process of decentralization of power in the Lugansk and Donetsk regions through the creation of United territorial communities. The budgets of the Lugansk and Donetsk regions were analyzed “before” and “in the conditions” of the public-military conflict in the Ukrainian Donbass and the process of decentralization of power in the Lugansk and Donetsk regions through the creation of United territorial communities. Based on the results of the analysis of the formation of organizational, methodological and financial prerequisites for the application of budgetary federalism in the Ukrainian Donbass, a structural and reproductive approach to the delimitation of the spending powers of communities, districts and regions with the obligatory provision of their sources of corresponding income is substantiated. It is recommended in the Ukrainian Donbass the introduction of the pilot project "State regulation of regional human development at the level of the administrative region", which was developed by experts of the Institute of Physical Economics. S.A. Podolyn and Berdyansk University of Management and the Ministry of Education and Science of Ukraine.