diff --git a/CHANGELOG.md b/CHANGELOG.md
index fdca506bbd..45465255d7 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -8,7 +8,8 @@ This project adheres to [Semantic Versioning](https://semver.org/).
 
 ### Fixed
 - KtLint CLI 0.43 doesn't work with JDK 1.8 ([#1271](https://github.com/pinterest/ktlint/issues/1271))
-
+- Fix false positive in rule spacing-between-declarations-with-annotations ([#1281] (https://github.com/pinterest/ktlint/issues/1281))
+- 
 ### Changed
 - Update Kotlin version to `1.6.0` release
 
diff --git a/ktlint-ruleset-experimental/src/main/kotlin/com/pinterest/ktlint/ruleset/experimental/SpacingBetweenDeclarationsWithAnnotationsRule.kt b/ktlint-ruleset-experimental/src/main/kotlin/com/pinterest/ktlint/ruleset/experimental/SpacingBetweenDeclarationsWithAnnotationsRule.kt
index 3da9d2c4fc..cc903893da 100644
--- a/ktlint-ruleset-experimental/src/main/kotlin/com/pinterest/ktlint/ruleset/experimental/SpacingBetweenDeclarationsWithAnnotationsRule.kt
+++ b/ktlint-ruleset-experimental/src/main/kotlin/com/pinterest/ktlint/ruleset/experimental/SpacingBetweenDeclarationsWithAnnotationsRule.kt
@@ -4,11 +4,15 @@ import com.pinterest.ktlint.core.Rule
 import com.pinterest.ktlint.core.ast.ElementType.MODIFIER_LIST
 import com.pinterest.ktlint.core.ast.children
 import org.jetbrains.kotlin.com.intellij.lang.ASTNode
+import org.jetbrains.kotlin.com.intellij.psi.PsiComment
+import org.jetbrains.kotlin.com.intellij.psi.PsiElement
 import org.jetbrains.kotlin.com.intellij.psi.PsiWhiteSpace
 import org.jetbrains.kotlin.com.intellij.psi.impl.source.tree.LeafPsiElement
 import org.jetbrains.kotlin.psi.KtAnnotationEntry
 import org.jetbrains.kotlin.psi.KtDeclaration
 import org.jetbrains.kotlin.psi.psiUtil.getPrevSiblingIgnoringWhitespaceAndComments
+import org.jetbrains.kotlin.psi.psiUtil.prevLeaf
+import org.jetbrains.kotlin.psi.psiUtil.prevLeafs
 
 /**
  * @see https://youtrack.jetbrains.com/issue/KT-35106
@@ -24,20 +28,41 @@ class SpacingBetweenDeclarationsWithAnnotationsRule : Rule("spacing-between-decl
             val declaration = node.psi.parent as? KtDeclaration
             val prevDeclaration =
                 declaration?.getPrevSiblingIgnoringWhitespaceAndComments(withItself = false) as? KtDeclaration
-            val prevWhiteSpace = prevDeclaration?.nextSibling as? PsiWhiteSpace
-            if (declaration != null && prevDeclaration != null && prevWhiteSpace?.text?.count { it == '\n' } == 1) {
+            val whiteSpaceAfterPreviousDeclaration = prevDeclaration?.nextSibling as? PsiWhiteSpace
+            val startOfDeclarationIncludingLeadingComment = node.psi.parent.getPrevLeafIgnoringCommentAndWhitespaceExceptBlankLines()
+            if (whiteSpaceAfterPreviousDeclaration?.text != null &&
+                startOfDeclarationIncludingLeadingComment?.text?.count { it == '\n' } == 1
+            ) {
                 emit(
                     node.startOffset,
                     "Declarations and declarations with annotations should have an empty space between.",
                     true
                 )
                 if (autoCorrect) {
-                    val indent = prevWhiteSpace.text.substringAfter('\n')
-                    (prevWhiteSpace.node as LeafPsiElement).rawReplaceWithText("\n\n$indent")
+                    val indent = whiteSpaceAfterPreviousDeclaration.text.substringAfter('\n')
+                    (whiteSpaceAfterPreviousDeclaration.node as LeafPsiElement).rawReplaceWithText("\n\n$indent")
                 }
             }
         }
     }
 
+    /**
+     * Gets the previous element but ignores white whitespaces (excluding blank lines) and comments. Note the difference
+     * with method [PsiElement.getPrevSiblingIgnoringWhitespaceAndComments] which excludes blank lines as well.
+     */
+    private fun PsiElement.getPrevLeafIgnoringCommentAndWhitespaceExceptBlankLines(): PsiElement? {
+        var prevLeaf: PsiElement? = this.prevLeaf()
+        val iterator = prevLeafs.iterator()
+        while (iterator.hasNext()) {
+            val psiElement = iterator.next()
+            if (psiElement is PsiComment || (psiElement is PsiWhiteSpace && psiElement.text?.count { it == '\n' } == 1)) {
+                prevLeaf = psiElement
+            } else {
+                break
+            }
+        }
+        return prevLeaf
+    }
+
     private fun ASTNode.hasAnnotationsAsChildren(): Boolean = children().find { it.psi is KtAnnotationEntry } != null
 }
diff --git a/ktlint-ruleset-experimental/src/test/kotlin/com/pinterest/ktlint/ruleset/experimental/SpacingBetweenDeclarationsWithAnnotationsRuleTest.kt b/ktlint-ruleset-experimental/src/test/kotlin/com/pinterest/ktlint/ruleset/experimental/SpacingBetweenDeclarationsWithAnnotationsRuleTest.kt
index 3b30306862..a5a7daf134 100644
--- a/ktlint-ruleset-experimental/src/test/kotlin/com/pinterest/ktlint/ruleset/experimental/SpacingBetweenDeclarationsWithAnnotationsRuleTest.kt
+++ b/ktlint-ruleset-experimental/src/test/kotlin/com/pinterest/ktlint/ruleset/experimental/SpacingBetweenDeclarationsWithAnnotationsRuleTest.kt
@@ -234,7 +234,7 @@ class SpacingBetweenDeclarationsWithAnnotationsRuleTest {
     }
 
     @Test
-    fun `missing space after comment with previous variable should do nothing`() {
+    fun `No blank line is required between comment and an annotated declaration`() {
         Assertions.assertThat(
             SpacingBetweenDeclarationsWithAnnotationsRule().lint(
                 """
@@ -250,4 +250,27 @@ class SpacingBetweenDeclarationsWithAnnotationsRuleTest {
             )
         ).isEmpty()
     }
+
+    @Test
+    fun `Issue 1281 - No blank line is required between comment and an annotated declaration when previous declaration end with a comment`() {
+        Assertions.assertThat(
+            SpacingBetweenDeclarationsWithAnnotationsRule().lint(
+                """
+                class KotlinPluginTest {
+                    // tag::setUp[]
+                    @BeforeEach
+                    fun setUp() {
+                    }
+                    // end::setUp[]
+
+                    // tag::testQuery[]
+                    @Test
+                        fun testFindById() {
+                    }
+                    // end::testQuery[]
+                }
+                """.trimIndent()
+            )
+        ).isEmpty()
+    }
 }