Cream together the softened butter and 1 cup granulated sugar until it's light and fluffy. This takes about 3-4 minutes with an electric mixer. Don't rush this step — it helps the cookies get that perfect tender texture.
Beat in the 2 eggs one at a time, then add the vanilla powder and lemon zest. Mix until everything is smooth and combined. The mixture should look pale yellow and smell incredible right now.
In a separate bowl, whisk together the 2 1/2 cups flour, 2 teaspoons baking powder, and 1/2 teaspoon salt. Add the dry ingredients to the wet mixture and stir until just combined. I always fold gently at the end instead of overmixing — you want the dough soft, not tough.
Roll dough into 1-inch balls and place them about 2 inches apart on a parchment-lined baking sheet. Brush each ball lightly with 1 tablespoon milk mixed with a tiny splash of water. Immediately sprinkle the red sanding sugar, blue sanding sugar, and rainbow sprinkles on top while the milk is still wet.
Bake at 350°F for 10-12 minutes until the edges are barely golden and the centers still look slightly soft. Don't panic if they look underbaked — they firm up as they cool. I always check mine at the 10-minute mark because my oven runs hot.
Cool the cookies on the baking sheet for 5 minutes, then transfer them to a wire rack. They'll continue setting up and become perfectly chewy inside with just enough crunch on the edges. This is when they smell the absolute best.