Open workspace settings JSON file by opening command palette (Cmd + Shift + A for me) and searching for Preferences > Open Workspace Settings (JSON).

Add the following:

{
  "css.validate": false,
  "editor.quickSuggestions": {
    "strings": true
  }
}

css.validate: false disables the default VSCode CSS validation so that Tailwind directives like @apply aren’t flagged as errors.

editor.quickSuggestions: { "strings": true } enables intellisense when editing string content which is useful when you want Tailwind’s class suggestions to appear as you HTML or JSX attributes.

Sources

• Tailwind CSS IntelliSense extension page