diff --git a/java/java-impl/src/com/intellij/codeInsight/daemon/impl/quickfix/CreateLocalFromUsageFix.java b/java/java-impl/src/com/intellij/codeInsight/daemon/impl/quickfix/CreateLocalFromUsageFix.java
index 9f65c7591c75..86d68ea58655 100644
--- a/java/java-impl/src/com/intellij/codeInsight/daemon/impl/quickfix/CreateLocalFromUsageFix.java
+++ b/java/java-impl/src/com/intellij/codeInsight/daemon/impl/quickfix/CreateLocalFromUsageFix.java
@@ -19,9 +19,11 @@ import com.intellij.openapi.project.Project;
 import com.intellij.openapi.util.TextRange;
 import com.intellij.psi.*;
 import com.intellij.psi.codeStyle.CodeStyleManager;
+import com.intellij.psi.codeStyle.JavaCodeStyleManager;
 import com.intellij.psi.codeStyle.JavaCodeStyleSettings;
 import com.intellij.psi.util.JavaElementKind;
 import com.intellij.psi.util.PsiTreeUtil;
+import com.intellij.psi.util.PsiTypesUtil;
 import com.intellij.psi.util.PsiUtil;
 import com.intellij.refactoring.IntroduceVariableUtil;
 import com.intellij.refactoring.ui.TypeSelectorManagerImpl;
@@ -88,6 +90,7 @@ public class CreateLocalFromUsageFix extends CreateVarFromUsageFix {
     final SmartTypePointer defaultType = SmartTypePointerManager.getInstance(project).createSmartTypePointer(expectedTypes[0]);
     final PsiType preferredType = TypeSelectorManagerImpl.getPreferredType(expectedTypes, expectedTypes[0]);
     PsiType type = preferredType != null ? preferredType : expectedTypes[0];
+    type = PsiTypesUtil.removeExternalAnnotations(type);
     if (LambdaUtil.notInferredType(type)) {
       type = PsiType.getJavaLangObject(element.getManager(), psiFile.getResolveScope());
     }
@@ -122,6 +125,7 @@ public class CreateLocalFromUsageFix extends CreateVarFromUsageFix {
     }
 
     PsiVariable var = (PsiVariable)decl.getDeclaredElements()[0];
+    var = (PsiVariable)JavaCodeStyleManager.getInstance(project).shortenClassReferences(var);
     boolean isFinal =
       JavaCodeStyleSettings.getInstance(psiFile).GENERATE_FINAL_LOCALS &&
       !CreateFromUsageUtils.isAccessedForWriting(expressions);
diff --git a/java/java-psi-impl/src/com/intellij/psi/impl/source/tree/java/PsiReferenceExpressionImpl.java b/java/java-psi-impl/src/com/intellij/psi/impl/source/tree/java/PsiReferenceExpressionImpl.java
index 340d062cf5b1..720244d34e28 100644
--- a/java/java-psi-impl/src/com/intellij/psi/impl/source/tree/java/PsiReferenceExpressionImpl.java
+++ b/java/java-psi-impl/src/com/intellij/psi/impl/source/tree/java/PsiReferenceExpressionImpl.java
@@ -194,7 +194,8 @@ public class PsiReferenceExpressionImpl extends ExpressionPsiElement implements
       List<ResolveResult[]> qualifiers = resolveAllQualifiers(expression, containingFile);
       JavaResolveResult[] result = expression.resolve(parentType, containingFile);
 
-      if (result.length == 0 && incompleteCode && parentType != JavaElementType.REFERENCE_EXPRESSION) {
+      if (result.length == 0 && incompleteCode && parentType != JavaElementType.REFERENCE_EXPRESSION &&
+          !PsiUtil.isAccessedForWriting(expression)) {
         result = expression.resolve(JavaElementType.REFERENCE_EXPRESSION, containingFile);
       }
 
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/afterNoExternalTypeAnnos.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/afterNoExternalTypeAnnos.java
new file mode 100644
index 000000000000..3c94aa69e629
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/afterNoExternalTypeAnnos.java
@@ -0,0 +1,10 @@
+// "Create local variable 'set'" "true-preview"
+import java.util.Set;
+import java.util.stream.Collectors;
+import java.util.stream.Stream;
+
+class X {
+  void test() {
+      Set<Integer> set = Stream.of(1, 2, 3).collect(Collectors.toSet());
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/afterSwitchPatternGeneric.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/afterSwitchPatternGeneric.java
index 190ba8539569..7506129b2050 100644
--- a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/afterSwitchPatternGeneric.java
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/afterSwitchPatternGeneric.java
@@ -14,9 +14,9 @@ class A {
 
 sealed interface BaseInterface<T> permits BaseInterface.Record1, BaseInterface.Record2{
 
-  record Record1<T>() implements BaseInterface<T> {
+  final class Record1<T> implements BaseInterface<T> {
   }
 
-  record Record2() implements BaseInterface<String> {
+  final class Record2 implements BaseInterface<String> {
   }
 }
\ No newline at end of file
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/beforeNoExternalTypeAnnos.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/beforeNoExternalTypeAnnos.java
new file mode 100644
index 000000000000..d011be48f474
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/beforeNoExternalTypeAnnos.java
@@ -0,0 +1,9 @@
+// "Create local variable 'set'" "true-preview"
+import java.util.stream.Collectors;
+import java.util.stream.Stream;
+
+class X {
+  void test() {
+    <caret>set = Stream.of(1, 2, 3).collect(Collectors.toSet());
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/beforeSwitchPatternGeneric.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/beforeSwitchPatternGeneric.java
index c6d746927576..de6694321565 100644
--- a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/beforeSwitchPatternGeneric.java
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage/beforeSwitchPatternGeneric.java
@@ -13,9 +13,9 @@ class A {
 
 sealed interface BaseInterface<T> permits BaseInterface.Record1, BaseInterface.Record2{
 
-  record Record1<T>() implements BaseInterface<T> {
+  final class Record1<T> implements BaseInterface<T> {
   }
 
-  record Record2() implements BaseInterface<String> {
+  final class Record2 implements BaseInterface<String> {
   }
 }
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/impl/quickfix/CreateLocalFromUsageTest.java b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/impl/quickfix/CreateLocalFromUsageTest.java
index cd57785cef92..e06c1098cca0 100644
--- a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/impl/quickfix/CreateLocalFromUsageTest.java
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/impl/quickfix/CreateLocalFromUsageTest.java
@@ -2,8 +2,11 @@
 package com.intellij.codeInsight.daemon.impl.quickfix;
 
 import com.intellij.codeInsight.daemon.quickFix.LightQuickFixParameterizedTestCase;
-import com.intellij.pom.java.LanguageLevel;
 import com.intellij.psi.codeStyle.JavaCodeStyleSettings;
+import com.intellij.testFramework.LightProjectDescriptor;
+import org.jetbrains.annotations.NotNull;
+
+import static com.intellij.testFramework.fixtures.LightJavaCodeInsightFixtureTestCase.JAVA_21_ANNOTATED;
 
 public class CreateLocalFromUsageTest extends LightQuickFixParameterizedTestCase {
   @Override
@@ -11,10 +14,14 @@ public class CreateLocalFromUsageTest extends LightQuickFixParameterizedTestCase
     return "/codeInsight/daemonCodeAnalyzer/quickFix/createLocalFromUsage";
   }
 
+  @Override
+  protected @NotNull LightProjectDescriptor getProjectDescriptor() {
+    return JAVA_21_ANNOTATED;
+  }
+
   @Override
   protected void setUp() throws Exception {
     super.setUp();
-    setLanguageLevel(LanguageLevel.JDK_21);
     JavaCodeStyleSettings.getInstance(getProject()).GENERATE_FINAL_LOCALS = getTestName(true).contains("final");
   }
 }