Question: Does one need to wear Shabbos clothes on chol hamoed?
Answer: The Shulchan Aruch (OC 529:1) writes that one should wear nicer clothes on Yom Tov than one does even on Shabbos. The Mishna Berura (529:12) explains that this is because of the special mitzva to be happy on yom tov (See Rambam, Yom Tov 6:17).
There is also a mitzva to treat yom tov with both oneg (joy) and kavod (honour), though there is a machlokes among the poskim as to whether one needs to treat chol hamoed with the same oneg and kavod.
The Shulchan Aruch Harav (OC 529:5) writes that these don’t apply on chol hamoed.
The Mishna Berura (530:1) quotes the Magen Avraham (OC 530:1), however, who writes that one needs to treat chol hamoed with kavod and notes that the Maharil would wear his Shabbos clothes on chol hamoed. Thus, the Chayei Adam (106:1) writes that one must wear one’s Shabbos clothes on chol hamoed.
Nonetheless, the Mishna Berura (Shaar Hatziyun 530:4) notes that while one needs to treat chol hamoed with respect, it isn’t on the same level as yom tov. Thus, while one needs to eat nicer foods and wear nicer clothes than on a regular weekday, one doesn’t need to wear ones finest (See Aruch Hashulchan OC 530:4).R’ Moshe Stern (Be'er Moshe 7:3:3) writes that even those that have to work on chol hamoed should ensure that they wear nicer clothes than usual where possible.