diff --git a/releasenotes.md b/releasenotes.md
index 940720c63..ea22e4593 100644
--- a/releasenotes.md
+++ b/releasenotes.md
@@ -140,6 +140,7 @@
 - Crash when creating `$Type*` where `$Type` is an optional type #2848
 - Crashes when using `io::EOF~!` in various unhandled places. #2848
 - Crash when trying to create a const zero untyped list #2847
+- Incorrect handling when reporting fn with optional compile time type #2862
 
 ### Stdlib changes
 - Add `ThreadPool` join function to wait for all threads to finish in the pool without destroying the threads.
diff --git a/src/compiler/compiler_internal.h b/src/compiler/compiler_internal.h
index 8828ee8d9..17d437010 100644
--- a/src/compiler/compiler_internal.h
+++ b/src/compiler/compiler_internal.h
@@ -3095,6 +3095,8 @@ INLINE const char *type_invalid_storage_type_name(Type *type)
 			return "a typeinfo";
 		case TYPE_WILDCARD:
 			return "an empty value";
+		case TYPE_OPTIONAL:
+			return "an optional with a compile time type";
 		default:
 			UNREACHABLE;
 	}
diff --git a/test/test_suite/expressions/optional_untyped_list_return.c3 b/test/test_suite/expressions/optional_untyped_list_return.c3
new file mode 100644
index 000000000..8075ace7d
--- /dev/null
+++ b/test/test_suite/expressions/optional_untyped_list_return.c3
@@ -0,0 +1,6 @@
+fn $typeof({})? foo() {} // #error: A function may not return an optional with a compile time type, only macros may do
+
+fn int main()
+{
+	return 0;
+}
\ No newline at end of file