diff --git a/apps/app/next-env.d.ts b/apps/app/next-env.d.ts
new file mode 100644
index 00000000..c4b7818f
--- /dev/null
+++ b/apps/app/next-env.d.ts
@@ -0,0 +1,6 @@
+/// <reference types="next" />
+/// <reference types="next/image-types/global" />
+import "./.next/dev/types/routes.d.ts";
+
+// NOTE: This file should not be edited
+// see https://nextjs.org/docs/app/api-reference/config/typescript for more information.
diff --git a/apps/ui/src/components/ui/category-autocomplete.tsx b/apps/ui/src/components/ui/category-autocomplete.tsx
index 236a08c0..956e6a96 100644
--- a/apps/ui/src/components/ui/category-autocomplete.tsx
+++ b/apps/ui/src/components/ui/category-autocomplete.tsx
@@ -1,5 +1,5 @@
 
-import * as React from "react";
+import { Tag } from "lucide-react";
 import { Autocomplete } from "@/components/ui/autocomplete";
 
 interface CategoryAutocompleteProps {
@@ -9,6 +9,7 @@ interface CategoryAutocompleteProps {
   placeholder?: string;
   className?: string;
   disabled?: boolean;
+  error?: boolean;
   "data-testid"?: string;
 }
 
@@ -19,6 +20,7 @@ export function CategoryAutocomplete({
   placeholder = "Select or type a category...",
   className,
   disabled = false,
+  error = false,
   "data-testid": testId,
 }: CategoryAutocompleteProps) {
   return (
@@ -27,10 +29,14 @@ export function CategoryAutocomplete({
       onChange={onChange}
       options={suggestions}
       placeholder={placeholder}
-      searchPlaceholder="Search category..."
+      searchPlaceholder="Search or type new category..."
       emptyMessage="No category found."
       className={className}
       disabled={disabled}
+      error={error}
+      icon={Tag}
+      allowCreate
+      createLabel={(v) => `Create "${v}"`}
       data-testid={testId}
       itemTestIdPrefix="category-option"
     />
diff --git a/apps/ui/tests/utils/components/autocomplete.ts b/apps/ui/tests/utils/components/autocomplete.ts
index 4850cf24..f9015b6d 100644
--- a/apps/ui/tests/utils/components/autocomplete.ts
+++ b/apps/ui/tests/utils/components/autocomplete.ts
@@ -57,3 +57,22 @@ export async function getCategoryOption(
     .replace(/\s+/g, "-")}`;
   return page.locator(`[data-testid="${optionTestId}"]`);
 }
+
+/**
+ * Click the "Create new" option for a category that doesn't exist
+ */
+export async function clickCreateNewCategoryOption(
+  page: Page
+): Promise<void> {
+  const option = page.locator('[data-testid="category-option-create-new"]');
+  await option.click();
+}
+
+/**
+ * Get the "Create new" option element for categories
+ */
+export async function getCreateNewCategoryOption(
+  page: Page
+): Promise<Locator> {
+  return page.locator('[data-testid="category-option-create-new"]');
+}