diff --git a/quickstep/src/com/android/launcher3/taskbar/NavbarButtonsViewController.java b/quickstep/src/com/android/launcher3/taskbar/NavbarButtonsViewController.java
index b768d60..69804bd 100644
--- a/quickstep/src/com/android/launcher3/taskbar/NavbarButtonsViewController.java
+++ b/quickstep/src/com/android/launcher3/taskbar/NavbarButtonsViewController.java
@@ -30,7 +30,9 @@
 import static com.android.systemui.shared.system.QuickStepContract.SYSUI_STATE_HOME_DISABLED;
 import static com.android.systemui.shared.system.QuickStepContract.SYSUI_STATE_IME_SHOWING;
 import static com.android.systemui.shared.system.QuickStepContract.SYSUI_STATE_IME_SWITCHER_SHOWING;
+import static com.android.systemui.shared.system.QuickStepContract.SYSUI_STATE_NOTIFICATION_PANEL_EXPANDED;
 import static com.android.systemui.shared.system.QuickStepContract.SYSUI_STATE_OVERVIEW_DISABLED;
+import static com.android.systemui.shared.system.QuickStepContract.SYSUI_STATE_QUICK_SETTINGS_EXPANDED;
 
 import android.animation.ObjectAnimator;
 import android.annotation.DrawableRes;
@@ -81,6 +83,7 @@
     private static final int FLAG_DISABLE_HOME = 1 << 7;
     private static final int FLAG_DISABLE_RECENTS = 1 << 8;
     private static final int FLAG_DISABLE_BACK = 1 << 9;
+    private static final int FLAG_NOTIFICATION_SHADE_EXPANDED = 1 << 10;
 
     private static final int MASK_IME_SWITCHER_VISIBLE = FLAG_SWITCHER_SUPPORTED | FLAG_IME_VISIBLE;
 
@@ -98,6 +101,8 @@
 
     private final AnimatedFloat mTaskbarNavButtonTranslationY = new AnimatedFloat(
             this::updateNavButtonTranslationY);
+    private final AnimatedFloat mNavButtonTranslationYMultiplier = new AnimatedFloat(
+            this::updateNavButtonTranslationY);
 
     // Initialized in init.
     private TaskbarControllers mControllers;
@@ -120,6 +125,7 @@
         mControllers = controllers;
         mNavButtonsView.getLayoutParams().height = mContext.getDeviceProfile().taskbarSize;
         parseSystemUiFlags(sharedState.sysuiStateFlags);
+        mNavButtonTranslationYMultiplier.value = 1;
 
         mA11yLongClickListener = view -> {
             mControllers.navButtonController.onButtonClick(BUTTON_A11Y_LONG_CLICK);
@@ -149,6 +155,11 @@
                 .getKeyguardBgTaskbar(),
                 flags -> (flags & FLAG_KEYGUARD_VISIBLE) == 0, AnimatedFloat.VALUE, 1, 0));
 
+        // Make sure to remove nav bar buttons translation when notification shade is expanded.
+        mPropertyHolders.add(new StatePropertyHolder(mNavButtonTranslationYMultiplier,
+                flags -> (flags & FLAG_NOTIFICATION_SHADE_EXPANDED) != 0, AnimatedFloat.VALUE,
+                0, 1));
+
         // Force nav buttons (specifically back button) to be visible during setup wizard.
         boolean isInSetup = !mContext.isUserSetupComplete();
         if (isThreeButtonNav || isInSetup) {
@@ -176,12 +187,12 @@
                 }
             }
 
-            // Animate taskbar background when IME shows
+            // Animate taskbar background when any of these flags are enabled
+            int flagsToShowBg = FLAG_IME_VISIBLE | FLAG_ONLY_BACK_FOR_BOUNCER_VISIBLE
+                    | FLAG_NOTIFICATION_SHADE_EXPANDED;
             mPropertyHolders.add(new StatePropertyHolder(
                     mControllers.taskbarDragLayerController.getNavbarBackgroundAlpha(),
-                    flags -> (flags & FLAG_IME_VISIBLE) != 0 ||
-                            (flags & FLAG_ONLY_BACK_FOR_BOUNCER_VISIBLE) != 0,
-                    AnimatedFloat.VALUE, 1, 0));
+                    flags -> (flags & flagsToShowBg) != 0, AnimatedFloat.VALUE, 1, 0));
 
             // Rotation button
             RotationButton rotationButton = new RotationButtonImpl(
@@ -258,6 +269,9 @@
         boolean isHomeDisabled = (sysUiStateFlags & SYSUI_STATE_HOME_DISABLED) != 0;
         boolean isRecentsDisabled = (sysUiStateFlags & SYSUI_STATE_OVERVIEW_DISABLED) != 0;
         boolean isBackDisabled = (sysUiStateFlags & SYSUI_STATE_BACK_DISABLED) != 0;
+        int shadeExpandedFlags = SYSUI_STATE_NOTIFICATION_PANEL_EXPANDED
+                | SYSUI_STATE_QUICK_SETTINGS_EXPANDED;
+        boolean isNotificationShadeExpanded = (sysUiStateFlags & shadeExpandedFlags) != 0;
 
         // TODO(b/202218289) we're getting IME as not visible on lockscreen from system
         updateStateForFlag(FLAG_IME_VISIBLE, isImeVisible);
@@ -266,6 +280,7 @@
         updateStateForFlag(FLAG_DISABLE_HOME, isHomeDisabled);
         updateStateForFlag(FLAG_DISABLE_RECENTS, isRecentsDisabled);
         updateStateForFlag(FLAG_DISABLE_BACK, isBackDisabled);
+        updateStateForFlag(FLAG_NOTIFICATION_SHADE_EXPANDED, isNotificationShadeExpanded);
 
         if (mA11yButton != null) {
             // Only used in 3 button
@@ -360,7 +375,8 @@
     }
 
     private void updateNavButtonTranslationY() {
-        mNavButtonsView.setTranslationY(mTaskbarNavButtonTranslationY.value);
+        mNavButtonsView.setTranslationY(mTaskbarNavButtonTranslationY.value
+                * mNavButtonTranslationYMultiplier.value);
     }
 
     private ImageView addButton(@DrawableRes int drawableId, @TaskbarButton int buttonType,
diff --git a/quickstep/src/com/android/launcher3/taskbar/TaskbarActivityContext.java b/quickstep/src/com/android/launcher3/taskbar/TaskbarActivityContext.java
index 370496a..8ae661f 100644
--- a/quickstep/src/com/android/launcher3/taskbar/TaskbarActivityContext.java
+++ b/quickstep/src/com/android/launcher3/taskbar/TaskbarActivityContext.java
@@ -25,6 +25,7 @@
 import static com.android.systemui.shared.system.WindowManagerWrapper.ITYPE_BOTTOM_TAPPABLE_ELEMENT;
 import static com.android.systemui.shared.system.WindowManagerWrapper.ITYPE_EXTRA_NAVIGATION_BAR;
 
+import android.animation.AnimatorSet;
 import android.app.ActivityOptions;
 import android.content.ActivityNotFoundException;
 import android.content.Context;
@@ -328,10 +329,9 @@
         mControllers.navbarButtonsViewController.updateStateForSysuiFlags(systemUiStateFlags);
         mControllers.taskbarViewController.setImeIsVisible(
                 mControllers.navbarButtonsViewController.isImeVisible());
-        boolean panelExpanded = (systemUiStateFlags & SYSUI_STATE_NOTIFICATION_PANEL_EXPANDED) != 0;
-        boolean inSettings = (systemUiStateFlags & SYSUI_STATE_QUICK_SETTINGS_EXPANDED) != 0;
-        mControllers.taskbarViewController.setNotificationShadeIsExpanded(
-                panelExpanded || inSettings);
+        int shadeExpandedFlags = SYSUI_STATE_NOTIFICATION_PANEL_EXPANDED
+                | SYSUI_STATE_QUICK_SETTINGS_EXPANDED;
+        onNotificationShadeExpandChanged((systemUiStateFlags & shadeExpandedFlags) != 0);
         mControllers.taskbarViewController.setRecentsButtonDisabled(
                 mControllers.navbarButtonsViewController.isRecentsDisabled());
         mControllers.stashedHandleViewController.setIsHomeButtonDisabled(
@@ -341,6 +341,21 @@
         mControllers.taskbarScrimViewController.updateStateForSysuiFlags(systemUiStateFlags);
     }
 
+    /**
+     * Hides the taskbar icons and background when the notication shade is expanded.
+     */
+    private void onNotificationShadeExpandChanged(boolean isExpanded) {
+        float alpha = isExpanded ? 0 : 1;
+        AnimatorSet anim = new AnimatorSet();
+        anim.play(mControllers.taskbarViewController.getTaskbarIconAlpha().getProperty(
+                TaskbarViewController.ALPHA_INDEX_NOTIFICATION_EXPANDED).animateToValue(alpha));
+        if (!isThreeButtonNav()) {
+            anim.play(mControllers.taskbarDragLayerController.getNotificationShadeBgTaskbar()
+                    .animateToValue(alpha));
+        }
+        anim.start();
+    }
+
     public void onRotationProposal(int rotation, boolean isValid) {
         mControllers.rotationButtonController.onRotationProposal(rotation, isValid);
     }
diff --git a/quickstep/src/com/android/launcher3/taskbar/TaskbarDragLayerController.java b/quickstep/src/com/android/launcher3/taskbar/TaskbarDragLayerController.java
index 05b0a11..cec892f 100644
--- a/quickstep/src/com/android/launcher3/taskbar/TaskbarDragLayerController.java
+++ b/quickstep/src/com/android/launcher3/taskbar/TaskbarDragLayerController.java
@@ -42,6 +42,8 @@
     private final AnimatedFloat mBgTaskbar = new AnimatedFloat(this::updateBackgroundAlpha);
     private final AnimatedFloat mBgNavbar = new AnimatedFloat(this::updateBackgroundAlpha);
     private final AnimatedFloat mKeyguardBgTaskbar = new AnimatedFloat(this::updateBackgroundAlpha);
+    private final AnimatedFloat mNotificationShadeBgTaskbar = new AnimatedFloat(
+            this::updateBackgroundAlpha);
     // Used to hide our background color when someone else (e.g. ScrimView) is handling it.
     private final AnimatedFloat mBgOverride = new AnimatedFloat(this::updateBackgroundAlpha);
 
@@ -65,6 +67,7 @@
 
         mBgTaskbar.value = 1;
         mKeyguardBgTaskbar.value = 1;
+        mNotificationShadeBgTaskbar.value = 1;
         mBgOverride.value = 1;
         updateBackgroundAlpha();
     }
@@ -95,6 +98,10 @@
         return mKeyguardBgTaskbar;
     }
 
+    public AnimatedFloat getNotificationShadeBgTaskbar() {
+        return mNotificationShadeBgTaskbar;
+    }
+
     public AnimatedFloat getOverrideBackgroundAlpha() {
         return mBgOverride;
     }
@@ -105,7 +112,8 @@
 
     private void updateBackgroundAlpha() {
         final float bgNavbar = mBgNavbar.value;
-        final float bgTaskbar = mBgTaskbar.value * mKeyguardBgTaskbar.value;
+        final float bgTaskbar = mBgTaskbar.value * mKeyguardBgTaskbar.value
+                * mNotificationShadeBgTaskbar.value;
         mTaskbarDragLayer.setTaskbarBackgroundAlpha(
                 mBgOverride.value * Math.max(bgNavbar, bgTaskbar)
         );
diff --git a/quickstep/src/com/android/launcher3/taskbar/TaskbarViewController.java b/quickstep/src/com/android/launcher3/taskbar/TaskbarViewController.java
index 08d2a06..09197c3 100644
--- a/quickstep/src/com/android/launcher3/taskbar/TaskbarViewController.java
+++ b/quickstep/src/com/android/launcher3/taskbar/TaskbarViewController.java
@@ -116,16 +116,6 @@
     }
 
     /**
-     * Should be called when the notification shade is expanded, so we can hide taskbar icons as
-     * well. Note that we are animating icons to appear / disappear.
-     */
-    public void setNotificationShadeIsExpanded(boolean isNotificationShadeExpanded) {
-        mTaskbarIconAlpha.getProperty(ALPHA_INDEX_NOTIFICATION_EXPANDED)
-                .animateToValue(isNotificationShadeExpanded ? 0 : 1)
-                .start();
-    }
-
-    /**
      * Should be called when the recents button is disabled, so we can hide taskbar icons as well.
      */
     public void setRecentsButtonDisabled(boolean isDisabled) {