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Your artwork is one group on one single main layer.
You need to separate that group and put the elements on separate main layers.
When using Illustrator 2022 and Photoshop 2022 you can also Copy and then paste the group into Photoshop, but that might result in an utter mess of <path> sublayers in Photoshop. When separating these in Illustrator first and sorting them on layers you might get more meaningful results.
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Thank you for responding. Does this mean every elements needs its own layer?
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This is where it gets complicated.
Which version is it? The current version 2022? Then no. You can copy in Illustrator and paste in Photoshop as layers. But: those layers in Photoshop will be an utter mess. And you cannot select layers by color as in Illustrator.
So you might still want to sort the artwork in Illustrator beforehand. And then it will help to give this a structure you can work with. Like group them by color or any other sorting you find practical.
If you have an older version or if you want to export as PSD for some reason, then you need main layers (not sub-layers). And then still: you don't need each single object on its own layer. Make a structure you can work with (I don't know what you want to do with it in Photoshop, only you know that)