Hi,
My apologies, I got super busy with a deadline and failed to follow up on this post. Thank you everyone for your responses. I’ve been trying different solutions but still haven’t found an answer.
I did try the interpret footage command and chose “merged layers”. Under the Alpha section, I chose “Straight–unmatted”. This has worked for me in the past (before having this problem), but this this time around it still ignored the alpha channel.
Importing the PSDs as compositions also ignored the alpha.
The only option that worked so far is, in Photoshop, opening the alpha channel as a selection and creating a layer mask from that. But in order to do this, I have to flatten my image/merge all the layers so the mask is affecting only one “master” layer.
The above approach involves a couple extra steps. Of course it would save time if AE would just read the alpha. I’ll post a follow up if I can find a better solution.
Thanks!