Table:
|  | As of December 31, |  |
| --- | --- | --- |
|  | 2019 | 2018 |
| Net operating loss and tax credit carryforwards | $612.9 | $584.9 |
| 163 (j) interest expense carryforward | 49.3 | — |
| Tax-deductible goodwill and amortizable intangibles | (48.6) | (29.4) |
| Capitalization of research and development expenses | 42.7 | — |
| Reserves and accruals | 27.5 | 57.4 |
| Property, plant and equipment | (81.2) | (63.5) |
| Inventories | 22.0 | 20.2 |
| Undistributed earnings of foreign subsidiaries | (63.7) | (48.7) |
| Share-based compensation | 10.3 | 7.7 |
| Pension | 26.3 | 24.3 |
| Other | 8.0 | 6.0 |
| Deferred tax assets and liabilities before valuation allowance | 605.5 | 558.9 |
| Valuation allowance | (357.9) | (347.5) |
| Net deferred tax asset | $247.6 | $211.4 |
Paragraphs:
The tax effects of temporary differences in the recognition of income and expense for tax and financial reporting purposes that give rise to significant portions of the net deferred tax asset (liability) are as follows (in millions):
As of December 31, 2019 and 2018, the Company had approximately $521.9 million and $768.9 million, respectively, of federal NOL carryforwards, before reduction for unrecognized tax benefits, which are subject to annual limitations prescribed in Section 382 of the Internal Revenue Code. The decrease is due to current year utilization. If not utilized, a portion of the NOLs will expire in varying amounts from 2024 to 2036; however, a small portion of the NOL that was generated after December 31, 2017 is carried forward indefinitely.
As of December 31, 2019 and 2018, the Company had approximately $134.5 million and $83.7 million, respectively, of federal credit carryforwards, before consideration of valuation allowance or reduction for unrecognized tax benefits, which are subject to annual limitations prescribed in Section 383 of the Internal Revenue Code. If not utilized, the credits will expire in varying amounts from 2028 to 2039.
As of December 31, 2019 and 2018, the Company had approximately $825.8 million and $801.0 million, respectively, of state NOL carryforwards, before consideration of valuation allowance or reduction for unrecognized tax benefits. If not utilized, a portion of the NOLs will expire in varying amounts starting in 2020.
Certain states have adopted the federal rule allowing unlimited NOL carryover for NOLs generated in tax years beginning after December 31, 2017. Therefore, a portion of the state NOLs generated after 2017 carry forward indefinitely. As of December 31, 2019 and 2018, the Company had $138.6 million and $115.8 million, respectively, of state credit carryforwards before consideration of valuation allowance or reduction for unrecognized tax benefits. If not utilized, a portion of the credits will begin to expire in varying amounts starting in 2020.
As of December 31, 2019 and 2018, the Company had approximately $757.1 million and $734.4 million, respectively, of foreign NOL carryforwards, before consideration of valuation allowance. If not utilized, a portion of the NOLs will begin to expire in varying amounts starting in 2020. A significant portion of these NOLs will expire by 2025.
As of December 31, 2019 and 2018, the Company had $76.8 million and $68.8 million, respectively, of foreign credit carryforwards before consideration of valuation allowance. If not utilized, the majority of these credits will expire by 2026.
The Company continues to maintain a valuation allowance of $186.3 million on a portion of its Japan NOLs, which expire in varying amounts from 2020 to 2024. In addition to the valuation allowance mentioned above on Japan NOLs, the Company continues to maintain a full valuation allowance on its U.S. state deferred tax assets, and a valuation allowance on foreign NOLs and tax credits in certain other foreign jurisdictions.
Question:
When does the credits expire if they are not utilized?
Answer: 2026