Is it possible to design a digital filter that rejects 60Hz noise while keeping step response in the time domain below one mili-second Have been trying to design IIR and FIR 60Hz notch filters but all have step response way above 10ms.
You can trade off steepness of the notch against time domain ringing. That's a fundamental trade off and there is no way around it. When using an IIR notch you can simply adjust the "Q" (quality factor). A Q of 3 will give a step response that's roughly 10ms long.