Under FAA regulations in 2026, a transponder with altitude-reporting capability (Mode C or ADS-B Out) is required for all aircraft operating at and above 10,000 feet MSL (Mean Sea Level), provided they are also at least 2,500 feet above the ground. Additionally, transponders are mandatory regardless of altitude when flying within Class A, B, or C airspace, or within the "Mode C Veil" (a 30-nautical-mile radius around the primary airports of Class B airspace). For aircraft without engine-driven electrical systems, such as certain gliders or balloons, there are specific exemptions for staying outside these controlled zones and below 10,000 feet. These requirements ensure that Air Traffic Control has a clear, real-time picture of all traffic in busy or high-altitude environments to maintain safe separation.