diff --git a/e2e/components/FilterPanel/FilterPanel-test.avt.e2e.js b/e2e/components/FilterPanel/FilterPanel-test.avt.e2e.js
new file mode 100644
index 0000000000..cd02c0d459
--- /dev/null
+++ b/e2e/components/FilterPanel/FilterPanel-test.avt.e2e.js
@@ -0,0 +1,31 @@
+/**
+ * Copyright IBM Corp. 2024, 2024
+ *
+ * This source code is licensed under the Apache-2.0 license found in the
+ * LICENSE file in the root directory of this source tree.
+ */
+
+'use strict';
+
+import { expect, test } from '@playwright/test';
+import { visitStory } from '../../test-utils/storybook';
+import { carbon } from '../../../packages/ibm-products/src/settings';
+
+test.describe('FilterPanel @avt', () => {
+  test('@avt-default-state', async ({ page }) => {
+    await visitStory(page, {
+      component: 'FilterPanel',
+      id: 'ibm-products-components-filter-panel-filterpanel--default',
+      globals: {
+        carbonTheme: 'white',
+      },
+    });
+
+    await page.click(`.${carbon.prefix}--accordion__heading`);
+    await page
+      .locator(`.${carbon.prefix}--accordion__item--active`)
+      .screenshot({ animations: 'disabled' });
+
+    await expect(page).toHaveNoACViolations('FilterPanel @avt-default-state');
+  });
+});
diff --git a/packages/ibm-products-styles/src/components/TagOverflow/_tag-overflow.scss b/packages/ibm-products-styles/src/components/TagOverflow/_tag-overflow.scss
index aa042accc3..b152b5ae79 100644
--- a/packages/ibm-products-styles/src/components/TagOverflow/_tag-overflow.scss
+++ b/packages/ibm-products-styles/src/components/TagOverflow/_tag-overflow.scss
@@ -68,6 +68,11 @@ $block-class-modal: #{$block-class}-modal;
   max-width: $spacing-09;
 }
 
+.#{c4p-settings.$carbon-prefix}--popover
+  .#{c4p-settings.$carbon-prefix}--popover-content {
+  white-space: normal;
+}
+
 .#{$block-class-overflow} {
   display: inline-block;
   vertical-align: bottom;
@@ -139,8 +144,6 @@ $block-class-modal: #{$block-class}-modal;
     margin: 0;
     background-color: inherit;
     color: inherit;
-    text-overflow: ellipsis;
-    white-space: nowrap;
   }
 
   .#{$block-class-overflow}__tag
diff --git a/packages/ibm-products-styles/src/components/_index-with-carbon.scss b/packages/ibm-products-styles/src/components/_index-with-carbon.scss
index 467f3209af..f816182334 100644
--- a/packages/ibm-products-styles/src/components/_index-with-carbon.scss
+++ b/packages/ibm-products-styles/src/components/_index-with-carbon.scss
@@ -77,3 +77,4 @@
 @use './FilterPanel/index-with-carbon' as *;
 @use './ConditionBuilder/index-with-carbon' as *;
 @use './GetStartedCard/index-with-carbon' as *;
+@use './Guidebanner/index-with-carbon' as *;
diff --git a/packages/ibm-products/src/components/TagOverflow/TagOverflow.js b/packages/ibm-products/src/components/TagOverflow/TagOverflow.js
index eea31b3400..34fee58c90 100644
--- a/packages/ibm-products/src/components/TagOverflow/TagOverflow.js
+++ b/packages/ibm-products/src/components/TagOverflow/TagOverflow.js
@@ -24,8 +24,6 @@ const componentName = 'TagOverflow';
 
 const allTagsModalSearchThreshold = 10;
 
-// TODO: support prop overflowType
-
 // Default values for props
 const defaults = {
   items: [],
@@ -182,8 +180,8 @@ export let TagOverflow = React.forwardRef(
       }
 
       const hiddenItems = items?.slice(visibleItemsArr.length);
-      const overflowItemsArr = hiddenItems?.map((item) => {
-        return { type: item.tagType, label: item.label, id: item.id };
+      const overflowItemsArr = hiddenItems?.map(({ tagType, ...other }) => {
+        return { type: tagType, ...other };
       });
 
       setVisibleItems(visibleItemsArr);
@@ -197,6 +195,16 @@ export let TagOverflow = React.forwardRef(
       onOverflowTagChange,
     ]);
 
+    const handleTagOnClose = useCallback(
+      (onClose, index) => {
+        onClose?.();
+        if (index <= visibleItems.length - 1) {
+          setPopoverOpen(false);
+        }
+      },
+      [visibleItems]
+    );
+
     return (
       <div
         {
@@ -211,23 +219,23 @@ export let TagOverflow = React.forwardRef(
         {...getDevtoolsProps(componentName)}
       >
         {visibleItems.length > 0 &&
-          visibleItems.map((item) => {
+          visibleItems.map((item, index) => {
             // Render custom components
             if (tagComponent) {
               return getCustomComponent(item);
             } else {
+              const { id, label, tagType, onClose, ...other } = item;
               // If there is no template prop, then render items as Tags
               return (
-                <div
-                  ref={(node) => itemRefHandler(item.id, node)}
-                  key={item.id}
-                >
-                  <Tooltip align="bottom" label={item.label}>
+                <div ref={(node) => itemRefHandler(id, node)} key={id}>
+                  <Tooltip align={overflowAlign} label={label}>
                     <Tag
+                      {...other}
                       className={`${blockClass}__item--tag`}
-                      type={item.tagType}
+                      type={tagType}
+                      onClose={() => handleTagOnClose(onClose, index)}
                     >
-                      {item.label}
+                      {label}
                     </Tag>
                   </Tooltip>
                 </div>
@@ -256,6 +264,7 @@ export let TagOverflow = React.forwardRef(
                 open={showAllModalOpen}
                 title={allTagsModalTitle}
                 onClose={handleModalClose}
+                overflowType={overflowType}
                 searchLabel={allTagsModalSearchLabel}
                 searchPlaceholder={allTagsModalSearchPlaceholderText}
                 portalTarget={allTagsModalTarget}
diff --git a/packages/ibm-products/src/components/TagOverflow/TagOverflow.stories.jsx b/packages/ibm-products/src/components/TagOverflow/TagOverflow.stories.jsx
index 06dc6a678d..578b59857f 100644
--- a/packages/ibm-products/src/components/TagOverflow/TagOverflow.stories.jsx
+++ b/packages/ibm-products/src/components/TagOverflow/TagOverflow.stories.jsx
@@ -5,7 +5,7 @@
  * LICENSE file in the root directory of this source tree.
  */
 
-import React from 'react';
+import React, { useState, useRef } from 'react';
 import { Theme } from '@carbon/react';
 
 import { pkg } from '../../settings';
@@ -120,3 +120,40 @@ CustomComponentsWithOverflowModal.args = {
   tagComponent: IconComponent,
   ...overflowAndModalStrings,
 };
+
+const TemplateWithClose = (argsIn) => {
+  const { containerWidth, allTagsModalTargetCustomDomNode, items, ...args } = {
+    ...argsIn,
+  };
+  const [liveTags, setLiveTags] = useState(
+    items.map((item) => ({
+      ...item,
+      filter: true,
+      onClose: () => handleTagClose(item.label),
+    }))
+  );
+
+  const handleTagClose = (key) => {
+    setLiveTags((prev) => prev.filter((item) => item.label !== key));
+  };
+
+  const ref = useRef();
+  return (
+    <div style={{ width: containerWidth }} ref={ref}>
+      <TagOverflow
+        {...args}
+        items={liveTags}
+        allTagsModalTarget={
+          allTagsModalTargetCustomDomNode ? ref.current : undefined
+        }
+      />
+    </div>
+  );
+};
+
+export const InteractiveTags = TemplateWithClose.bind({});
+InteractiveTags.args = {
+  items: tags,
+  containerWidth: 500,
+  ...overflowAndModalStrings,
+};
diff --git a/packages/ibm-products/src/components/TagOverflow/TagOverflowModal.tsx b/packages/ibm-products/src/components/TagOverflow/TagOverflowModal.tsx
index cef0eab080..107826844f 100644
--- a/packages/ibm-products/src/components/TagOverflow/TagOverflowModal.tsx
+++ b/packages/ibm-products/src/components/TagOverflow/TagOverflowModal.tsx
@@ -39,6 +39,7 @@ interface TagOverflowModalProps {
   className?: string;
   onClose?: () => void;
   open?: boolean;
+  overflowType?: 'default' | 'tag';
   portalTarget?: ReactNode;
   searchLabel?: string;
   searchPlaceholder?: string;
@@ -53,6 +54,7 @@ export const TagOverflowModal = ({
   title,
   onClose,
   open,
+  overflowType,
   portalTarget: portalTargetIn,
   searchLabel = defaults.searchLabel,
   searchPlaceholder,
@@ -64,28 +66,12 @@ export const TagOverflowModal = ({
   const renderPortalUse = usePortalTarget(portalTargetIn);
 
   const getFilteredItems = (): AllTags => {
-    let newFilteredModalTags: AllTags = [];
-    if (open) {
-      if (search === '' && allTags) {
-        newFilteredModalTags = allTags.slice(0);
-      } else {
-        const lCaseSearch = search.toLocaleLowerCase();
-
-        allTags?.forEach((tag) => {
-          const dataSearch = tag['data-search']
-            ?.toLocaleLowerCase()
-            ?.indexOf(lCaseSearch);
-          const labelSearch = tag.label
-            ?.toLocaleLowerCase()
-            ?.indexOf(lCaseSearch);
-
-          if (dataSearch > -1 || labelSearch > -1) {
-            newFilteredModalTags.push(tag);
-          }
-        });
-      }
+    if (open && search && allTags) {
+      return allTags.filter((tag) =>
+        tag.label?.toLocaleLowerCase()?.includes(search.toLocaleLowerCase())
+      );
     }
-    return newFilteredModalTags;
+    return allTags || [];
   };
 
   const handleSearch = (evt) => {
@@ -119,11 +105,14 @@ export const TagOverflowModal = ({
         />
       </ModalHeader>
       <ModalBody className={`${blockClass}__body`} hasForm>
-        {getFilteredItems().map(({ label, id, ...other }) => (
-          <Tag {...other} filter={false} key={id}>
-            {label}
-          </Tag>
-        ))}
+        {getFilteredItems().map(({ label, id, filter, ...other }) => {
+          const isFilterable = overflowType === 'tag' ? filter : false;
+          return (
+            <Tag {...other} key={id} filter={isFilterable}>
+              {label}
+            </Tag>
+          );
+        })}
       </ModalBody>
       <div className={`${blockClass}__fade`} />
     </ComposedModal>
@@ -140,6 +129,7 @@ TagOverflowModal.propTypes = {
   className: PropTypes.string,
   onClose: PropTypes.func,
   open: PropTypes.bool,
+  overflowType: PropTypes.oneOf(['default', 'tag']),
   portalTarget: PropTypes.node,
   searchLabel: PropTypes.string,
   searchPlaceholder: PropTypes.string,
diff --git a/packages/ibm-products/src/components/TagOverflow/TagOverflowPopover.js b/packages/ibm-products/src/components/TagOverflow/TagOverflowPopover.js
index 3d6d596a1a..4aa960fed0 100644
--- a/packages/ibm-products/src/components/TagOverflow/TagOverflowPopover.js
+++ b/packages/ibm-products/src/components/TagOverflow/TagOverflowPopover.js
@@ -102,29 +102,39 @@ export const TagOverflowPopover = React.forwardRef(
           <PopoverContent>
             <div ref={overflowTagContent} className={`${blockClass}__content`}>
               <ul className={`${blockClass}__tag-list`}>
-                {getOverflowPopoverItems().map((tag) => {
-                  const tagProps = {};
-                  if (overflowType === 'tag') {
-                    tagProps.type = 'high-contrast';
-                  }
-                  if (overflowType === 'default') {
-                    tagProps.filter = false;
+                {getOverflowPopoverItems().map(
+                  ({ label, id, tagType, filter, onClose, ...other }) => {
+                    const typeValue =
+                      overflowType === 'tag' ? 'high-contrast' : tagType;
+                    const isFilterable =
+                      overflowType === 'tag' ? filter : false;
+
+                    return (
+                      <li
+                        className={cx(`${blockClass}__tag-item`, {
+                          [`${blockClass}__tag-item--default`]:
+                            overflowType === 'default',
+                          [`${blockClass}__tag-item--tag`]:
+                            overflowType === 'tag',
+                        })}
+                        key={id}
+                      >
+                        {overflowType === 'tag' ? (
+                          <Tag
+                            {...other}
+                            onClose={() => onClose?.()}
+                            type={typeValue}
+                            filter={isFilterable}
+                          >
+                            {label}
+                          </Tag>
+                        ) : (
+                          label
+                        )}
+                      </li>
+                    );
                   }
-                  return (
-                    <li
-                      className={cx(`${blockClass}__tag-item`, {
-                        [`${blockClass}__tag-item--default`]:
-                          overflowType === 'default',
-                        [`${blockClass}__tag-item--tag`]:
-                          overflowType === 'tag',
-                      })}
-                      key={tag.id}
-                    >
-                      {tag.label}
-                      {/* {React.cloneElement(tag, tagProps)} */}
-                    </li>
-                  );
-                })}
+                )}
               </ul>
               {overflowTags.length > allTagsModalSearchThreshold && (
                 <Link