Magic keyboard touch ID not working...

I have a 2020 mac air using Ventura OS and the touch ID is set up and functioning.

I recently purchased a magic keyboard with touch ID and every thing works except the touch ID.

I like to use an external monitor and keep the a mac air closed and that is why I need the magic keyboard touch ID to work... PLEASE HELP... most help is directed only to the mac touch ID... nothing seems to help...