1. Preheat the oven to 350°F and line baking sheets with parchment paper.

2. In a medium bowl, whisk together the flour, baking powder, salt, and nutmeg.

3. In a large bowl, beat the softened butter and granulated sugar until light and fluffy.

4. Mix in the egg, eggnog, and vanilla extract until smooth and fully combined.

5. Gradually add the dry ingredients to the wet ingredients and mix just until a soft dough forms.

6. Scoop tablespoon-sized portions of dough onto the prepared baking sheets, spacing them about 2 inches apart.

7. Gently flatten each mound slightly with the bottom of a glass or your hand.

8. Bake for 9 to 11 minutes, or until the edges are set and the tops look dry without browning too much.

9. Let the cookies cool on the baking sheet for 5 minutes, then transfer to a wire rack and cool completely.

10. In a small bowl, whisk the powdered sugar with 3 to 4 tablespoons eggnog or milk until smooth and spreadable.

11. Frost the cooled cookies and finish with holiday sprinkles or a light dusting of nutmeg.

12. Let the frosting set before serving or storing.