Is this okay when talking about a photo:
Hey, Y'all look so happy in the photo!
And
Hey, Y'all looked so happy in the photo!
Assuming that you are looking at the photo now, it would be usual to use "look". g. southern US) which is not used in standard English outside of its range.
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Assuming that you are looking at the photo now, it would be usual to use "look".
"y'all" is a distinctively regional form (e.g. southern US) which is not used in standard English outside of its range. Unless you are sure you want to use it, use "you all" instead. In either case, it should not be capitalised.