diff --git a/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/BaseMultiGradleVersionIT.kt b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/BaseMultiGradleVersionIT.kt
new file mode 100644
index 00000000000..59cb0ad3b1a
--- /dev/null
+++ b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/BaseMultiGradleVersionIT.kt
@@ -0,0 +1,17 @@
+package org.jetbrains.kotlin.gradle
+
+import org.junit.runner.RunWith
+import org.junit.runners.Parameterized
+import org.junit.runners.Parameterized.Parameter
+import org.junit.runners.Parameterized.Parameters
+
+@RunWith(Parameterized::class)
+abstract class BaseMultiGradleVersionIT : BaseGradleIT() {
+    @Parameter lateinit var gradleVersion: String
+
+    companion object {
+        @JvmStatic
+        @Parameters(name = "Test with Gradle version {0}")
+        fun params() = listOf("2.10", "2.14.1", "3.2", "3.3", "3.4").map { arrayOf(it) }
+    }
+}
\ No newline at end of file
diff --git a/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KaptIT.kt b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KaptIT.kt
index 71d808e317c..22e8159d049 100644
--- a/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KaptIT.kt
+++ b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KaptIT.kt
@@ -109,7 +109,7 @@ class KaptIT: BaseGradleIT() {
 
     private fun doTestIncrementalBuild(projectName: String, compileTasks: Array<String>) {
         val compileTasksUpToDate = compileTasks.map { it + " UP-TO-DATE" }.toTypedArray()
-        val project = Project(projectName, GRADLE_VERSION)
+        val project = Project(projectName, "2.10")
 
         project.build("build") {
             assertSuccessful()
diff --git a/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KotlinGradlePluginMultiVersionIT.kt b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KotlinGradlePluginMultiVersionIT.kt
new file mode 100644
index 00000000000..5eb0e87091f
--- /dev/null
+++ b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KotlinGradlePluginMultiVersionIT.kt
@@ -0,0 +1,49 @@
+package org.jetbrains.kotlin.gradle
+
+import org.jetbrains.kotlin.gradle.util.modify
+import org.junit.Test
+import java.io.File
+
+class KotlinGradlePluginMultiVersionIT : BaseMultiGradleVersionIT() {
+    @Test
+    fun testJavaIcCompatibility() {
+        val version = gradleVersion.split(".").map(String::toInt)
+        val expectIncrementalCompilation = version.let { (major, minor) -> major > 2 || major == 2 && minor >= 14 }
+        val expectVerboseIncrementalLogs = version.let { (major, minor) -> major < 3 || major == 3 && minor < 4 }
+
+        val project = Project("kotlinJavaProject", gradleVersion)
+        project.setupWorkingDir()
+
+        val buildScript = File(project.projectDir, "build.gradle")
+
+        buildScript.modify { "$it\n" + "compileJava.options.incremental = true" }
+        project.build("build") {
+            assertSuccessful()
+        }
+
+        // Then modify a Java source and check that compileJava is incremental:
+        File(project.projectDir, "src/main/java/demo/HelloWorld.java").modify { "$it\n" + "class NewClass { }" }
+        project.build("build") {
+            assertSuccessful()
+            if (expectIncrementalCompilation && expectVerboseIncrementalLogs)
+                assertContains("Incremental compilation")
+            if (expectIncrementalCompilation)
+                assertNotContains("not incremental") else
+                assertContains("not incremental")
+        }
+
+        // Then modify a Kotlin source and check that Gradle sees that Java is not up-to-date:
+        File(project.projectDir, "src/main/kotlin/helloWorld.kt").modify {
+            it.trim('\r', '\n').trimEnd('}') + "\nval z: Int = 0 }"
+        }
+        project.build("build") {
+            assertSuccessful()
+            assertContains(":compileKotlin")
+            assertNotContains(":compileJava UP-TO-DATE")
+            if (expectIncrementalCompilation)
+                assertNotContains("not incremental") else
+                assertContains("not incremental")
+            assertNotContains("None of the classes needs to be compiled!")
+        }
+    }
+}
\ No newline at end of file
diff --git a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/plugin/KotlinPlugin.kt b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/plugin/KotlinPlugin.kt
index b75be85dc9a..369aabd3607 100755
--- a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/plugin/KotlinPlugin.kt
+++ b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/plugin/KotlinPlugin.kt
@@ -31,6 +31,7 @@ import org.jetbrains.kotlin.gradle.internal.Kapt3KotlinGradleSubplugin.Companion
 import org.jetbrains.kotlin.gradle.internal.initKapt
 import org.jetbrains.kotlin.gradle.plugin.android.AndroidGradleWrapper
 import org.jetbrains.kotlin.gradle.tasks.*
+import org.jetbrains.kotlin.gradle.utils.ParsedGradleVersion
 import org.jetbrains.kotlin.incremental.configureMultiProjectIncrementalCompilation
 import org.jetbrains.kotlin.incremental.multiproject.ArtifactDifferenceRegistryProviderAndroidWrapper
 import java.io.File
@@ -520,19 +521,25 @@ internal open class KotlinAndroidPlugin(
 }
 
 private fun configureJavaTask(kotlinTask: KotlinCompile, javaTask: AbstractCompile, logger: Logger) {
-    // Since we cannot update classpath statically, java not able to detect changes in the classpath after kotlin compiler.
-    // Therefore this (probably inefficient since java cannot decide "uptodateness" by the list of changed class files, but told
-    // explicitly being out of date whenever any kotlin files are compiled
+    // Gradle Java IC in older Gradle versions (before 2.14) cannot check .class directories updates.
+    // To make it work, reset the up-to-date status of compileJava with this flag.
     kotlinTask.anyClassesCompiled = false
-
-    javaTask.outputs.upToDateWhen { task ->
-        val kotlinClassesCompiled = kotlinTask.anyClassesCompiled
-        if (kotlinClassesCompiled) {
-            logger.info("Marking $task out of date, because kotlin classes are changed")
+    val gradleSupportsJavaIcWithClassesDirs = ParsedGradleVersion.parse(javaTask.project.gradle.gradleVersion)
+                                                      ?.let { it >= ParsedGradleVersion(2, 14) } ?: false
+    if (!gradleSupportsJavaIcWithClassesDirs) {
+        javaTask.outputs.upToDateWhen { task ->
+            if (kotlinTask.anyClassesCompiled) {
+                logger.info("Marking $task out of date, because kotlin classes are changed")
+                false
+            } else true
         }
-        !kotlinClassesCompiled
     }
 
+    // Make Gradle check if the javaTask is up-to-date based on the Kotlin classes
+    javaTask.inputs.dir(kotlinTask.destinationDir)
+    // Also, use kapt1 annotations file for up-to-date check since annotation processing is done with javac
+    kotlinTask.kaptOptions.annotationsFile?.let { javaTask.inputs.file(it) }
+
     javaTask.dependsOn(kotlinTask.name)
     /*
      * It's important to modify javaTask.classpath only in doFirst,