diff --git a/compiler/src/dotty/tools/dotc/transform/TailRec.scala b/compiler/src/dotty/tools/dotc/transform/TailRec.scala
index 9330016f3292..ba6f1599def6 100644
--- a/compiler/src/dotty/tools/dotc/transform/TailRec.scala
+++ b/compiler/src/dotty/tools/dotc/transform/TailRec.scala
@@ -277,23 +277,11 @@ class TailRec extends MiniPhase {
     def yesTailTransform(tree: Tree)(using Context): Tree =
       transform(tree, tailPosition = true)
 
-    /** If not in tail position a tree traversal may not be needed.
-     *
-     *  A recursive  call may still be in tail position if within the return
-     *  expression of a labeled block.
-     *  A tree traversal may also be needed to report a failure to transform
-     *  a recursive call of a @tailrec annotated method (i.e. `isMandatory`).
-     */
-    private def isTraversalNeeded =
-      isMandatory || tailPositionLabeledSyms.size > 0
-
     def noTailTransform(tree: Tree)(using Context): Tree =
-      if (isTraversalNeeded) transform(tree, tailPosition = false)
-      else tree
+      transform(tree, tailPosition = false)
 
     def noTailTransforms[Tr <: Tree](trees: List[Tr])(using Context): List[Tr] =
-      if (isTraversalNeeded) trees.mapConserve(noTailTransform).asInstanceOf[List[Tr]]
-      else trees
+      trees.mapConserve(noTailTransform).asInstanceOf[List[Tr]]
 
     override def transform(tree: Tree)(using Context): Tree = {
       /* Rewrite an Apply to be considered for tail call transformation. */
@@ -444,7 +432,7 @@ class TailRec extends MiniPhase {
 
         case Return(expr, from) =>
           val fromSym = from.symbol
-          val inTailPosition = fromSym.is(Label) && tailPositionLabeledSyms.contains(fromSym)
+          val inTailPosition = !fromSym.is(Label) || tailPositionLabeledSyms.contains(fromSym)
           cpy.Return(tree)(transform(expr, inTailPosition), from)
 
         case _ =>
diff --git a/tests/run/tailrec-return.check b/tests/run/tailrec-return.check
new file mode 100644
index 000000000000..361e76d8a285
--- /dev/null
+++ b/tests/run/tailrec-return.check
@@ -0,0 +1,7 @@
+6
+false
+true
+false
+true
+Ada Lovelace, Alan Turing
+List(9, 10)
diff --git a/tests/run/tailrec-return.scala b/tests/run/tailrec-return.scala
new file mode 100644
index 000000000000..aa760960403d
--- /dev/null
+++ b/tests/run/tailrec-return.scala
@@ -0,0 +1,66 @@
+object Test:
+
+  @annotation.tailrec
+  def sum(n: Int, acc: Int = 0): Int =
+    if n != 0 then return sum(n - 1, acc + n)
+    acc
+
+  @annotation.tailrec
+  def isEven(n: Int): Boolean =
+    if n != 0 && n != 1 then return isEven(n - 2)
+    if n == 1 then return false
+    true
+
+  @annotation.tailrec
+  def isEvenApply(n: Int): Boolean =
+    // Return inside an `Apply.fun`
+    (
+      if n != 0 && n != 1 then return isEvenApply(n - 2)
+      else if n == 1 then return false
+      else (x: Boolean) => x
+    )(true)
+
+  @annotation.tailrec
+  def isEvenWhile(n: Int): Boolean =
+    // Return inside a `WhileDo.cond`
+    while(
+      if n != 0 && n != 1 then return isEvenWhile(n - 2)
+      else if n == 1 then return false
+      else true
+    ) {}
+    true
+
+  @annotation.tailrec
+  def isEvenReturn(n: Int): Boolean =
+    // Return inside a `Return`
+    return
+      if n != 0 && n != 1 then return isEvenReturn(n - 2)
+      else if n == 1 then return false
+      else true
+
+  @annotation.tailrec
+  def names(l: List[(String, String) | Null], acc: List[String] = Nil): List[String] =
+    l match
+      case Nil => acc.reverse
+      case x :: xs =>
+        if x == null then return names(xs, acc)
+
+        val displayName = x._1 + " " + x._2
+        names(xs, displayName :: acc)
+
+  def nonTail(l: List[Int]): List[Int] =
+    l match
+      case Nil => Nil
+      case x :: xs =>
+        // The call to nonTail should *not* be eliminated
+        (x + 1) :: nonTail(xs)
+
+
+  def main(args: Array[String]): Unit =
+    println(sum(3))
+    println(isEven(5))
+    println(isEvenApply(6))
+    println(isEvenWhile(7))
+    println(isEvenReturn(8))
+    println(names(List(("Ada",  "Lovelace"), null, ("Alan", "Turing"))).mkString(", "))
+    println(nonTail(List(8, 9)))