ABLE Accounts

Rules for Making ABLE Deposits

Here are some important rules to think about related to putting money in an ABLE account:

  1. There are limits on how much you can deposit each year.
  2. You can’t make any more deposits if the total amount of your contributions goes over a certain level, until your account balance drops back down. For the Colorado ABLE program, the maximum contribution amount is $400,000.
  3. You can move money from a 529 education account into an ABLE account.

These rules are explained in more detail below.

1. Yearly Deposit Limits

There are two limits on how much money can be put in your ABLE account each calendar year:

  • Up to $16,000 in total deposits can come from any source — you, your family and friends, your benefits, and other unearned income, and
  • If you have a job, you can deposit another $12,880 of your own earned income into your account. The $12,880 must be from your own earnings, and if you earn less than $12,880, the amount you can contribute would be lower.

Combined, this means that if you work, you could save as much as $28,880 in your ABLE account in 2022.

Keep good records

You may need to make sure that too much money isn’t contributed into your account (even if it is other people making the deposits). Colorado ABLE will automatically stop accepting deposits for the rest of the year once $16,000 has been deposited in the account (unless you submit paperwork to deposit more than that amount), but not every state does this automatically. Check with your ABLE program if you have questions about this.

Important: Taking money out of your account doesn’t mean you can put more in. The deposit limits are on how much total money is put into the account each year. Taking some out doesn’t change that.


Sam gets Supplemental Security Income (SSI) and Health First Colorado (Medicaid) benefits. He doesn’t work, so he has no earned income.

Sam’s mother helps him by putting $500 a month into Sam’s ABLE account. Sam’s done the math and knows that by the end of the year, his mother will have deposited a total of $6,000. Sam’s brother also helps out, by making a big $5,000 deposit into Sam’s ABLE account in February. Combined, his mother and brother will put $11,000 into Sam’s ABLE account over the course of the year.

Under ABLE account rules, the most Sam or anyone else deposits can only add up to $16,000. Since Sam already knows that $11,000 is going to be deposited, that means only $5,000 in other money can be added to the account this year.

2. Deposit Limit if Your ABLE Account Has a Lot of Money

Each state sets a maximum amount that can be in an ABLE account, which might be $200,000 – $500,000 or more. For the Colorado ABLE program, the limit is $400,000. If your ABLE account balance reaches the maximum amount, you cannot make any more deposits until the account balance drops back down. Note: This limit doesn’t affect many people.


Evelyn has an ABLE account in a state that doesn’t allow any more deposits if the total in her account is $400,000 or more. Right now, Evelyn only has $5,000 in her ABLE account. Even if she and her family and friends deposit the maximum amount allowed for many years, she still won’t be close to the $400,000 limit.

3. Moving Money from 529 Accounts to ABLE Accounts

529 accounts are a type of account that lets people save money for college or other educational expenses. They work very similarly to ABLE accounts. In fact, they are so similar that ABLE accounts are officially called “529A accounts.”

Money from a 529 account can be rolled over tax-free into an ABLE account. That means money can be moved from a 529 account and into an ABLE account with no penalties. In this way, money that hasn’t been or won’t be used for educational expenses can instead be used for any qualified disability-related expenses from an ABLE account.

Here are a couple of important things to understand about rolling money over from a 529 account to an ABLE account:

  • The 529 account must be in the name of the ABLE account owner or a family member, and
  • The rollover counts toward the ABLE account annual deposit limit for all sources other than your own earned income ($16,000 in 2022).
  • In Colorado, a 529 account gets a tax deduction but an ABLE account does not, so you might have to pay the state for any taxes you would have paid on the amount transferred from a 529 account into an ABLE account (this is called a "recapture").

Maria has $10,000 in a 529 educational savings account her parents set up when she was younger. Now 25, Maria isn’t in school anymore and doesn’t plan to return to school. If she just takes the money out of the 529 account and spends it on other things, she’ll have to pay taxes and a penalty.

But instead, Maria rolls over the $10,000 tax-free from the 529 account into an ABLE account, which she can open because she’s legally blind. Now, she can use the money on disability-related expenses without paying taxes or penalties.

Maria remembers to write down that she has already deposited $10,000 for 2022 into her account, so that she can make sure not to go over the $16,000 annual limit on contributions from sources other than her own earnings.

Since she has a job, Maria knows that she can separately deposit up to $12,880 from her earnings into her ABLE account.

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