diff --git a/php.editor/src/org/netbeans/modules/php/editor/indent/FormatVisitor.java b/php.editor/src/org/netbeans/modules/php/editor/indent/FormatVisitor.java
--- a/php.editor/src/org/netbeans/modules/php/editor/indent/FormatVisitor.java
+++ b/php.editor/src/org/netbeans/modules/php/editor/indent/FormatVisitor.java
@@ -466,7 +466,7 @@
 
             boolean indentationIncluded = false;
             while (ts.moveNext() && (ts.token().id() == PHPTokenId.WHITESPACE && countOfNewLines(ts.token().text()) == 0)
-                    || isComment(ts.token())) {
+                    || (lastIndex < ts.index() && isComment(ts.token()))) { // #268920 check lastIndex to prevent an infinite loop
                 if (ts.token().id() == PHPTokenId.PHP_LINE_COMMENT && !indentationIncluded) {
                     formatTokens.add(new FormatToken.IndentToken(ts.offset(), options.indentSize));
                     indentationIncluded = true;
diff --git a/php.editor/src/org/netbeans/modules/php/editor/parser/GSFPHPParser.java b/php.editor/src/org/netbeans/modules/php/editor/parser/GSFPHPParser.java
--- a/php.editor/src/org/netbeans/modules/php/editor/parser/GSFPHPParser.java
+++ b/php.editor/src/org/netbeans/modules/php/editor/parser/GSFPHPParser.java
@@ -87,6 +87,13 @@
     private ParserResult result = null;
     private boolean projectPropertiesListenerAdded = false;
 
+    // it's for testing
+    private static int unitTestCaretPosition = -1;
+
+    public static void setUnitTestCaretPosition(int unitTestCaretPosition) {
+        GSFPHPParser.unitTestCaretPosition = unitTestCaretPosition;
+    }
+
     static {
         LOGGER.log(Level.INFO, "Parsing of big PHP files enabled: {0} (max size: {1})", new Object[] {PARSE_BIG_FILES, BIG_FILE_SIZE});
     }
@@ -163,6 +170,9 @@
         aspTags = languageProperties.areAspTagsEnabled();
         try {
             int caretOffset = GsfUtilities.getLastKnownCaretOffset(snapshot, event);
+            if (caretOffset < 0 && unitTestCaretPosition >= 0) {
+                caretOffset = unitTestCaretPosition;
+            }
             LOGGER.log(Level.FINE, "caretOffset: {0}", caretOffset); //NOI18N
             Context context = new Context(snapshot, caretOffset);
             result = parseBuffer(context, Sanitize.NONE, null);
diff --git a/php.editor/test/unit/data/testfiles/formatting/issue268920.php b/php.editor/test/unit/data/testfiles/formatting/issue268920.php
new file mode 100644
--- /dev/null
+++ b/php.editor/test/unit/data/testfiles/formatting/issue268920.php
@@ -0,0 +1,15 @@
+<?php
+
+class Example {
+
+}
+
+$closure = (static function ($examples) {
+    $i = 0;
+    foreach ($examples as $example) { /* @var $example /*FORMAT_START*/Example/*FORMAT_END*/
+        $i++;
+?>
+<?php
+    }
+});
+?>
diff --git a/php.editor/test/unit/data/testfiles/formatting/issue268920.php.formatted b/php.editor/test/unit/data/testfiles/formatting/issue268920.php.formatted
new file mode 100644
--- /dev/null
+++ b/php.editor/test/unit/data/testfiles/formatting/issue268920.php.formatted
@@ -0,0 +1,15 @@
+<?php
+
+class Example {
+
+}
+
+$closure = (static function ($examples) {
+    $i = 0;
+    foreach ($examples as $example) { /* @var $example Example
+        $i++;
+?>
+<?php
+    }
+});
+?>
diff --git a/php.editor/test/unit/data/testfiles/formatting/templates/issue268920.php b/php.editor/test/unit/data/testfiles/formatting/templates/issue268920.php
new file mode 100644
--- /dev/null
+++ b/php.editor/test/unit/data/testfiles/formatting/templates/issue268920.php
@@ -0,0 +1,15 @@
+<?php
+
+class Example {
+
+}
+
+$closure = (static function ($examples) {
+    $i = 0;
+    foreach ($examples as $example) { /* @var $example /*FORMAT_START*/Example/*FORMAT_END*/
+        $i++;
+?>
+<?php
+    }
+});
+?>
diff --git a/php.editor/test/unit/data/testfiles/formatting/templates/issue268920.php.formatted b/php.editor/test/unit/data/testfiles/formatting/templates/issue268920.php.formatted
new file mode 100644
--- /dev/null
+++ b/php.editor/test/unit/data/testfiles/formatting/templates/issue268920.php.formatted
@@ -0,0 +1,15 @@
+<?php
+
+class Example {
+
+}
+
+$closure = (static function ($examples) {
+    $i = 0;
+    foreach ($examples as $example) { /* @var $example Example
+        $i++;
+?>
+<?php
+    }
+});
+?>
diff --git a/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTemplateTest.java b/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTemplateTest.java
--- a/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTemplateTest.java
+++ b/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTemplateTest.java
@@ -553,4 +553,9 @@
         reformatFileContents("testfiles/formatting/templates/issue262205_04.php", options, true);
     }
 
+    public void testIssue268920() throws Exception {
+        HashMap<String, Object> options = new HashMap<>(FmtOptions.getDefaults());
+        reformatFileContents("testfiles/formatting/templates/issue268920.php", options, true);
+    }
+
 }
diff --git a/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTest.java b/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTest.java
--- a/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTest.java
+++ b/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTest.java
@@ -764,4 +764,8 @@
         reformatFileContents("testfiles/formatting/issue268171.php", options);
     }
 
+    public void testIssue268920() throws Exception {
+        HashMap<String, Object> options = new HashMap<>(FmtOptions.getDefaults());
+        reformatFileContents("testfiles/formatting/issue268920.php", options);
+    }
 }
diff --git a/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTestBase.java b/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTestBase.java
--- a/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTestBase.java
+++ b/php.editor/test/unit/src/org/netbeans/modules/php/editor/indent/PHPFormatterTestBase.java
@@ -52,6 +52,7 @@
 import org.netbeans.modules.html.editor.lib.api.HtmlVersion;
 import org.netbeans.modules.php.editor.PHPTestBase;
 import org.netbeans.modules.php.editor.lexer.PHPTokenId;
+import org.netbeans.modules.php.editor.parser.GSFPHPParser;
 import org.openide.filesystems.FileObject;
 
 /**
@@ -84,6 +85,12 @@
         HtmlVersion.DEFAULT_VERSION_UNIT_TESTS_OVERRIDE = HtmlVersion.HTML41_TRANSATIONAL;
     }
 
+    @Override
+    protected void tearDown() throws Exception {
+        super.tearDown();
+        GSFPHPParser.setUnitTestCaretPosition(-1);
+    }
+
     protected void reformatFileContents(String file, IndentPrefs indentPrefs, int initialIndent) throws Exception {
         FileObject fo = getTestFile(file);
         assertNotNull(fo);
@@ -184,6 +191,7 @@
             }
 
             TokenFormatter.setUnitTestCarretPosition(carretPosition);
+            GSFPHPParser.setUnitTestCaretPosition(carretPosition);
             doc.remove(0, doc.getLength());
             doc.insertString(0, text, null);
             doc.putProperty(TokenFormatter.TEMPLATE_HANDLER_PROPERTY, new Object());