diff --git a/compiler/fir/analysis-tests/testData/resolve/diagnostics/testIllegalAnnotationClass.kt b/compiler/fir/analysis-tests/testData/resolve/diagnostics/testIllegalAnnotationClass.kt
new file mode 100644
index 00000000000..20fc13b1970
--- /dev/null
+++ b/compiler/fir/analysis-tests/testData/resolve/diagnostics/testIllegalAnnotationClass.kt
@@ -0,0 +1,22 @@
+// FILE: State.java
+
+package simulation
+
+@Retention(RetentionPolicy.RUNTIME)
+public @interface State {
+    @NotNull @NonNls
+    String name();
+    String @NotNull [] storages() default {};
+}
+
+// FILE: KotlinImporterComponent.kt
+
+package simulation
+
+// KotlinMavenImporter.kt:407:1
+@State(
+    name = "AutoImportedSourceRoots"
+)
+class KotlinImporterComponent {
+    class State(var directories: List<String> = ArrayList())
+}
\ No newline at end of file
diff --git a/compiler/fir/analysis-tests/testData/resolve/diagnostics/testIllegalAnnotationClass.txt b/compiler/fir/analysis-tests/testData/resolve/diagnostics/testIllegalAnnotationClass.txt
new file mode 100644
index 00000000000..8df815368a9
--- /dev/null
+++ b/compiler/fir/analysis-tests/testData/resolve/diagnostics/testIllegalAnnotationClass.txt
@@ -0,0 +1,18 @@
+FILE: KotlinImporterComponent.kt
+    @R|State|(name = String(AutoImportedSourceRoots)) public final class KotlinImporterComponent : R|kotlin/Any| {
+        public constructor(): R|simulation/KotlinImporterComponent| {
+            super<R|kotlin/Any|>()
+        }
+
+        public final class State : R|kotlin/Any| {
+            public constructor(directories: R|kotlin/collections/List<kotlin/String>| = R|java/util/ArrayList.ArrayList|<R|ft<kotlin/String, kotlin/String?>!|>()): R|simulation/KotlinImporterComponent.State| {
+                super<R|kotlin/Any|>()
+            }
+
+            public final var directories: R|kotlin/collections/List<kotlin/String>| = R|<local>/directories|
+                public get(): R|kotlin/collections/List<kotlin/String>|
+                public set(value: R|kotlin/collections/List<kotlin/String>|): R|kotlin/Unit|
+
+        }
+
+    }
diff --git a/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirDiagnosticsTestGenerated.java b/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirDiagnosticsTestGenerated.java
index 28819360c1f..5c664cff5aa 100644
--- a/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirDiagnosticsTestGenerated.java
+++ b/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirDiagnosticsTestGenerated.java
@@ -1081,6 +1081,11 @@ public class FirDiagnosticsTestGenerated extends AbstractFirDiagnosticsTest {
             runTest("compiler/fir/analysis-tests/testData/resolve/diagnostics/supertypeInitializedWithoutPrimaryConstructor.kt");
         }
 
+        @TestMetadata("testIllegalAnnotationClass.kt")
+        public void testTestIllegalAnnotationClass() throws Exception {
+            runTest("compiler/fir/analysis-tests/testData/resolve/diagnostics/testIllegalAnnotationClass.kt");
+        }
+
         @TestMetadata("typeArgumentsNotAllowed.kt")
         public void testTypeArgumentsNotAllowed() throws Exception {
             runTest("compiler/fir/analysis-tests/testData/resolve/diagnostics/typeArgumentsNotAllowed.kt");
diff --git a/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirDiagnosticsWithLightTreeTestGenerated.java b/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirDiagnosticsWithLightTreeTestGenerated.java
index 5c70f88cf13..91f176b51b1 100644
--- a/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirDiagnosticsWithLightTreeTestGenerated.java
+++ b/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirDiagnosticsWithLightTreeTestGenerated.java
@@ -1081,6 +1081,11 @@ public class FirDiagnosticsWithLightTreeTestGenerated extends AbstractFirDiagnos
             runTest("compiler/fir/analysis-tests/testData/resolve/diagnostics/supertypeInitializedWithoutPrimaryConstructor.kt");
         }
 
+        @TestMetadata("testIllegalAnnotationClass.kt")
+        public void testTestIllegalAnnotationClass() throws Exception {
+            runTest("compiler/fir/analysis-tests/testData/resolve/diagnostics/testIllegalAnnotationClass.kt");
+        }
+
         @TestMetadata("typeArgumentsNotAllowed.kt")
         public void testTypeArgumentsNotAllowed() throws Exception {
             runTest("compiler/fir/analysis-tests/testData/resolve/diagnostics/typeArgumentsNotAllowed.kt");
diff --git a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/transformers/FirAbstractTreeTransformerWithSuperTypes.kt b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/transformers/FirAbstractTreeTransformerWithSuperTypes.kt
index ab5236227ea..8e6ac26905d 100644
--- a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/transformers/FirAbstractTreeTransformerWithSuperTypes.kt
+++ b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/transformers/FirAbstractTreeTransformerWithSuperTypes.kt
@@ -52,6 +52,11 @@ abstract class FirAbstractTreeTransformerWithSuperTypes(
         data: Nothing?
     ): CompositeTransformResult<FirStatement> {
         return withScopeCleanup {
+            // Otherwise annotations may try to resolve
+            // themselves as inner classes of the `firClass`
+            // if their names match
+            firClass.transformAnnotations(this, null)
+
             // ? Is it Ok to use original file session here ?
             val superTypes = lookupSuperTypes(
                 firClass,
@@ -76,6 +81,8 @@ abstract class FirAbstractTreeTransformerWithSuperTypes(
 
             nestedClassifierScope(firClass)?.let(scopes::add)
 
+            // Note that annotations are still visited here
+            // again, although there's no need in it
             transformElement(firClass, data)
         }
     }