diff --git a/idea/src/org/jetbrains/kotlin/idea/quickfix/QuickFixRegistrar.kt b/idea/src/org/jetbrains/kotlin/idea/quickfix/QuickFixRegistrar.kt
index d978daaa6fd..c388dd73d46 100644
--- a/idea/src/org/jetbrains/kotlin/idea/quickfix/QuickFixRegistrar.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/quickfix/QuickFixRegistrar.kt
@@ -627,6 +627,8 @@ class QuickFixRegistrar : QuickFixContributor {
         CONSTRUCTOR_IN_OBJECT.registerFactory(ChangeObjectToClassFix)
 
         REDUNDANT_LABEL_WARNING.registerFactory(RemoveRedundantLabelFix)
+        NOT_A_FUNCTION_LABEL.registerFactory(RemoveReturnLabelFix)
+        NOT_A_FUNCTION_LABEL_WARNING.registerFactory(RemoveReturnLabelFix)
 
         ACCIDENTAL_OVERRIDE.registerFactory(MakePrivateAndOverrideMemberFix.AccidentalOverrideFactory)
 
diff --git a/idea/src/org/jetbrains/kotlin/idea/quickfix/RemoveReturnLabelFix.kt b/idea/src/org/jetbrains/kotlin/idea/quickfix/RemoveReturnLabelFix.kt
index 95f72b060e4..ad95fa1519c 100644
--- a/idea/src/org/jetbrains/kotlin/idea/quickfix/RemoveReturnLabelFix.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/quickfix/RemoveReturnLabelFix.kt
@@ -23,7 +23,8 @@ class RemoveReturnLabelFix(element: KtReturnExpression) : KotlinQuickFixAction<K
     companion object : KotlinSingleIntentionActionFactory() {
         override fun createAction(diagnostic: Diagnostic): KotlinQuickFixAction<KtReturnExpression>? {
             val returnExpression = diagnostic.psiElement as? KtReturnExpression ?: return null
-            return RemoveReturnLabelFix(returnExpression)
+            return if (returnExpression.labeledExpression == null) null
+            else RemoveReturnLabelFix(returnExpression)
         }
     }
 }
\ No newline at end of file
diff --git a/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/.inspection b/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/.inspection
new file mode 100644
index 00000000000..57b0556676c
--- /dev/null
+++ b/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/.inspection
@@ -0,0 +1 @@
+org.jetbrains.kotlin.idea.inspections.migration.RestrictReturnStatementTargetMigrationInspection
diff --git a/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple.kt b/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple.kt
new file mode 100644
index 00000000000..ae2eff083d5
--- /dev/null
+++ b/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple.kt
@@ -0,0 +1,8 @@
+// LANGUAGE_VERSION: 1.4
+// PROBLEM: none
+// ERROR: Target label does not denote a function
+
+fun testValLabelInReturn() {
+    <caret>L@ val fn = { return@L }
+    fn()
+}
\ No newline at end of file
diff --git a/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple2.kt b/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple2.kt
new file mode 100644
index 00000000000..e0f30323f68
--- /dev/null
+++ b/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple2.kt
@@ -0,0 +1,7 @@
+// LANGUAGE_VERSION: 1.4
+// SKIP_ERRORS_AFTER
+
+fun testValLabelInReturn() {
+    L@ val fn = { return@L<caret> }
+    fn()
+}
\ No newline at end of file
diff --git a/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple2.kt.after b/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple2.kt.after
new file mode 100644
index 00000000000..8d024d01e4f
--- /dev/null
+++ b/idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple2.kt.after
@@ -0,0 +1,7 @@
+// LANGUAGE_VERSION: 1.4
+// SKIP_ERRORS_AFTER
+
+fun testValLabelInReturn() {
+    L@ val fn = { return }
+    fn()
+}
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/kotlin/idea/inspections/LocalInspectionTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/inspections/LocalInspectionTestGenerated.java
index 5585db3f7e1..b1caf88262b 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/inspections/LocalInspectionTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/inspections/LocalInspectionTestGenerated.java
@@ -10950,6 +10950,29 @@ public class LocalInspectionTestGenerated extends AbstractLocalInspectionTest {
         }
     }
 
+    @TestMetadata("idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration")
+    @TestDataPath("$PROJECT_ROOT")
+    @RunWith(JUnit3RunnerWithInners.class)
+    public static class RestrictReturnStatementTargetMigration extends AbstractLocalInspectionTest {
+        private void runTest(String testDataFilePath) throws Exception {
+            KotlinTestUtils.runTest(this::doTest, this, testDataFilePath);
+        }
+
+        public void testAllFilesPresentInRestrictReturnStatementTargetMigration() throws Exception {
+            KotlinTestUtils.assertAllTestsPresentByMetadataWithExcluded(this.getClass(), new File("idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration"), Pattern.compile("^([\\w\\-_]+)\\.(kt|kts)$"), null, true);
+        }
+
+        @TestMetadata("simple.kt")
+        public void testSimple() throws Exception {
+            runTest("idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple.kt");
+        }
+
+        @TestMetadata("simple2.kt")
+        public void testSimple2() throws Exception {
+            runTest("idea/testData/inspectionsLocal/restrictReturnStatementTargetMigration/simple2.kt");
+        }
+    }
+
     @TestMetadata("idea/testData/inspectionsLocal/safeCastWithReturn")
     @TestDataPath("$PROJECT_ROOT")
     @RunWith(JUnit3RunnerWithInners.class)