  In the framework of real-time time-dependent density functional theory
(RT-TDDFT) we unravel the layer-resolved dynamics of the electronic structure
of a (Fe)$_1$/(MgO)$_3$(001) multilayer system after an optical excitation with
a frequency below the band gap of bulk MgO. Substantial transient changes to
the electronic structure, which persist after the duration of the pulse, are
mainly observed for in-plane polarized electric fields, corresponding to a
laser pulse arriving perpendicular to the interface. While the strongest charge
redistribution takes place in the Fe layer, a time-dependent change in the
occupation numbers is visible in all layers, mediated by the presence of
interface states. The time evolution of the layer-resolved time-dependent
occupation numbers indicates a strong orbital dependence with the depletion
from in-plane orbitals (e. g., $d_{x^2-y^2}$ of Fe) and accumulation in
out-of-plane orbitals ($d_{3z^2-r^2}$ of Fe and $p_z$ of apical oxygen). We
also observe a small net charge transfer away from oxygen towards the Mg sites
even for MgO layers which are not directly in contact with the metallic Fe.
