Bring the butter and cream cheese to room temperature.
Preheat the oven to 375 degrees Fahrenheit.
Prepare a large cookie sheet by covering it with a piece of parchment paper.
Using a handheld mixer, cream butter with the cream cheese in a large bowl. If using a stand mixer, you will want to use the paddle attachment.
Add the powdered sugar and beat on low speed. Add the egg and vanilla and continue to mix until everything is incorporated.
In a medium bowl, sift together the flour, baking powder and salt.
Add this flour mixture to the wet ingredients and mix with the electric mixer until fully combined.
Using a cookie scoop or spoon, scoop out the cream cheese cookie dough and form into 24 balls.
Place the cookie dough balls onto the prepare baking sheet and leave at least 1 inch of space in between each cookie.
Bake the cookies for 9-10 minutes until set and lightly golden brown on the bottom.
Remove the cookies from the baking sheet and cool to room temperature on a wire cooling rack.
When they are cool, dust the cookies with powdered sugar.
Notes
*If using salted butter, omit the ¼ teaspoon of salt. Just by adding some lemon zest, a little almond extract, or even some mini chocolate chips, this cream cheese cookie recipe can easily be adjusted to make a variety of flavors to suit everyone's taste.
These cream cheese sugar cookies can be kept at room temperature in an airtight container for up to a week, or frozen for up to three months.