The Settings opened by clicking the notification are the Per Project
settings, and those are not what you need in this case.
To fix this, go to
File->Other Settings->Default Settings
- Expand
Build, Execution, Deployment
- Expand
Compiler
- In
Annotation Processors
checkEnable annotation processing
- You may need to re-open the project to get the settings to take effect.
- Enjoy
For complete reference – screenshot with appropriate settings screen: