I've been playing a bit with raytraceresults for my EntityBullet logic and I was messing with the vectors you get when you hit something. I've found that I can use RayTraceResult#hitVec to get exact coordinates of hit, but it works only for blocks. I wanted to use it for entities to be able to calculate damage based on the position of the hit, but it always get's the entity position rather than the hit position. Is there some way to calculate it on the entity/entity hitbox?

You can do similar things to what raytracing blocks does, just for entity hitboxes. As in study the code for raytracing blocks and write similar code for entities. There really shouldn't be much difference since the code is working with AABBoxes in both cases.

However entity hitboxes won't work if you want to detect specific body parts. In that case you can see my suggestion here:

 

Okay, I will try that. I have tried comparing the bullet Y position with Entity eye height on hit, but that seems to work only after 1 tick after spawning which might be issue in close range fights (especially when the velocity is quite huge).