Preheat oven to 350°F.
In a large bowl using a hand-held mixer, beat butter, cream cheese, lemon zest, and granulated sugar until blended.
Add in egg, vanilla, and lemon extract.
Add in flour, baking powder, and ½ cup confectioners sugar. With the mixer on low, gradually beat into creamed mixture.
Using a 2-tablespoon cookie scoop, scoop dough and then roll in the remaining ½ cup of confectioners’ sugar. Place approximately 6 dough balls on parchment paper-lined baking sheets. (Cookies will spread.)
Bake until they no longer appear wet on top, 8-11 minutes. After about 5 minutes cooling on the pan (they will be soft!), place on cooling racks to cool completely.