diff --git a/ChangeLog.md b/ChangeLog.md
index 17087977aa..71eeee9e42 100644
--- a/ChangeLog.md
+++ b/ChangeLog.md
@@ -10,6 +10,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 ### Fixed
 
 - Fix analyzer [RCS1090](https://josefpihrt.github.io/docs/roslynator/analyzers/RCS1090) ([PR](https://github.com/dotnet/roslynator/pull/1566))
+- Fix analyzer [RCS1124](https://josefpihrt.github.io/docs/roslynator/analyzers/RCS1124) ([PR](https://github.com/dotnet/roslynator/pull/1572))
 - [CLI] Fix command `generate-doc` ([PR](https://github.com/dotnet/roslynator/pull/1568), [PR](https://github.com/dotnet/roslynator/pull/1570))
 
 ### Change
diff --git a/src/Analyzers.CodeFixes/CSharp/CodeFixes/LocalDeclarationStatementCodeFixProvider.cs b/src/Analyzers.CodeFixes/CSharp/CodeFixes/LocalDeclarationStatementCodeFixProvider.cs
index 45db233aaf..ab1057011d 100644
--- a/src/Analyzers.CodeFixes/CSharp/CodeFixes/LocalDeclarationStatementCodeFixProvider.cs
+++ b/src/Analyzers.CodeFixes/CSharp/CodeFixes/LocalDeclarationStatementCodeFixProvider.cs
@@ -67,7 +67,7 @@ private static async Task<Document> RefactorAsync(
 
         SemanticModel semanticModel = await document.GetSemanticModelAsync(cancellationToken).ConfigureAwait(false);
 
-        ExpressionSyntax value = GetExpressionToInline(localDeclaration, semanticModel, cancellationToken);
+        ExpressionSyntax value = GetExpressionToInline(localDeclaration, nextStatement, semanticModel, cancellationToken);
 
         StatementSyntax newStatement = GetStatementWithInlinedExpression(nextStatement, value);
 
@@ -93,7 +93,11 @@ private static async Task<Document> RefactorAsync(
         return await document.ReplaceStatementsAsync(statementsInfo, newStatements, cancellationToken).ConfigureAwait(false);
     }
 
-    private static ExpressionSyntax GetExpressionToInline(LocalDeclarationStatementSyntax localDeclaration, SemanticModel semanticModel, CancellationToken cancellationToken)
+    private static ExpressionSyntax GetExpressionToInline(
+        LocalDeclarationStatementSyntax localDeclaration,
+        StatementSyntax statement,
+        SemanticModel semanticModel,
+        CancellationToken cancellationToken)
     {
         VariableDeclarationSyntax variableDeclaration = localDeclaration.Declaration;
 
@@ -114,20 +118,41 @@ private static ExpressionSyntax GetExpressionToInline(LocalDeclarationStatementS
         {
             expression = expression.Parenthesize();
 
-            ExpressionSyntax typeExpression = (variableDeclaration.Type.IsVar)
-                ? variableDeclaration.Variables[0].Initializer.Value
-                : variableDeclaration.Type;
+            TypeSyntax type = variableDeclaration.Type;
+            ITypeSymbol typeSymbol;
 
-            ITypeSymbol typeSymbol = semanticModel.GetTypeSymbol(typeExpression, cancellationToken);
+            if (type.IsVar)
+            {
+                typeSymbol = semanticModel.GetTypeSymbol(variableDeclaration.Variables[0].Initializer.Value, cancellationToken)!;
+                type = typeSymbol.ToTypeSyntax().WithSimplifierAnnotation();
+            }
+            else
+            {
+                typeSymbol = semanticModel.GetTypeSymbol(type, cancellationToken)!;
+            }
 
-            if (typeSymbol.SupportsExplicitDeclaration())
+            bool ShouldAddCast()
             {
-                TypeSyntax type = typeSymbol.ToMinimalTypeSyntax(semanticModel, localDeclaration.SpanStart);
+                if (!typeSymbol.SupportsExplicitDeclaration())
+                    return false;
+
+                if (statement.IsKind(SyntaxKind.ReturnStatement))
+                {
+                    IMethodSymbol enclosingSymbol = semanticModel.GetEnclosingSymbol<IMethodSymbol>(variableDeclaration.Type.SpanStart, cancellationToken);
+
+                    if (enclosingSymbol is not null
+                        && SymbolEqualityComparer.Default.Equals(typeSymbol, enclosingSymbol.ReturnType))
+                    {
+                        return false;
+                    }
+                }
 
-                expression = SyntaxFactory.CastExpression(type, expression).WithSimplifierAnnotation();
+                return true;
             }
 
-            return expression;
+            return (ShouldAddCast())
+                ? SyntaxFactory.CastExpression(type.WithoutTrivia(), expression).WithSimplifierAnnotation()
+                : expression;
         }
     }
 
diff --git a/src/Tests/Analyzers.Tests/RCS1124InlineLocalVariableTests.cs b/src/Tests/Analyzers.Tests/RCS1124InlineLocalVariableTests.cs
index 7e27c7659e..b3468a52e8 100644
--- a/src/Tests/Analyzers.Tests/RCS1124InlineLocalVariableTests.cs
+++ b/src/Tests/Analyzers.Tests/RCS1124InlineLocalVariableTests.cs
@@ -101,6 +101,33 @@ void M()
 ");
     }
 
+    [Fact, Trait(Traits.Analyzer, DiagnosticIdentifiers.InlineLocalVariable)]
+    public async Task Test_NullableReturnType_ReturnsNullable()
+    {
+        await VerifyDiagnosticAndFixAsync(@"
+public struct S;
+
+public class C
+{
+    public static S? M()
+    {
+        [|S? i = new S();|]
+        return i;
+    }
+}
+", @"
+public struct S;
+
+public class C
+{
+    public static S? M()
+    {
+        return new S();
+    }
+}
+");
+    }
+
     [Fact, Trait(Traits.Analyzer, DiagnosticIdentifiers.InlineLocalVariable)]
     public async Task TestNoDiagnostic_YieldReturnIsNotLastStatement()
     {