Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to be reversed.
Significant deferred tax assets and liabilities consisted of the following (in thousands):
We are required to evaluate the realizability of our deferred tax assets in both our U.S. and non-U.S. jurisdictions on an ongoing basis to determine whether there is a need for a valuation allowance with respect to such deferred tax assets. From the fourth quarter of fiscal 2009 to the third quarter of fiscal 2018, we maintained a 100% valuation allowance against most of our U.S. deferred tax assets because there was insufficient positive evidence to overcome the existing negative evidence such that it was not more likely than not that the U.S. deferred tax assets were realizable.
While we reported U.S. pre-tax income in fiscal 2015 and fiscal 2017, because we reported U.S. pre-tax losses during the previous seven fiscal years, we continued to maintain the 100% valuation allowance through the third quarter of fiscal 2018.
As of December 29, 2018, we had reported positive operating performance in the U.S. for two consecutive fiscal years and had also reported a cumulative threeyear U.S. pre-tax profit. In addition, during the fourth quarter of fiscal 2018, we completed our financial plan for fiscal 2019 and expected continued positive operating performance in the U.S. We also considered forecasts of future taxable income and evaluated the utilization of net operating losses and tax credit carryforwards prior to their expiration.
After considering these factors, we determined that the positive evidence overcame any negative evidence and concluded that it was more likely than not that the U.S. deferred tax assets were realizable. As a result, we released the valuation allowance against a significant portion of the U.S. federal deferred tax assets and a portion of the U.S. state deferred tax assets during the fourth quarter of fiscal 2018.
The valuation allowance decreased by $75.8 million in fiscal 2018, primarily due to the release of the valuation allowance on U.S. deferred tax assets. As of December 28, 2019, we maintained a valuation allowance of $36.6 million, primarily related to California deferred tax assets and foreign tax credit carryovers, due to uncertainty about the future realization of these assets.
Table:
 | As of | 
 | December 28, 2019 | December 29, 2018
Tax credits | $44,696 | $39,586
Inventory reserve | 12,350 | 10,850
Other reserves and accruals | 5,852 | 5,398
Non-statutory stock options | 2,982 | 2,722
Depreciation and amortization | 27,758 | 1,979
Net operating loss carryforwards | 21,410 | 61,275
Gross deferred tax assets | 115,048 | 121,810
Valuation allowance | (36,604) | (34,037)
Total deferred tax assets | 78,444 | 87,773
Acquired intangibles and fixed assets | (13,997) | (12,667)
Unrealized investment gains | (106) | (107)
Tax on undistributed earnings | (75) | (53)
Total deferred tax liabilities | (14,178) | (12,827)
Net deferred tax assets | $64,266 | $74,946


Question: What is the average Inventory reserve for 2018 and 2019?
Answer: 11600
Calculation: (12,350 + 10,850) / 2