Preheat oven to 350°F.
In a large bowl using a hand-held mixer, beat butter, cream cheese, orange zest, and granulated sugar until blended.
Add in egg, vanilla, orange extract, and the red and yellow food coloring.
Add in flour, baking powder, and ½ cup confectioners' sugar. With the mixer on low, gradually beat into a creamed mixture.
Using a 2-tablespoon cookie scoop, create balls and roll them in the remaining confectioners' sugar.
Place on a parchment-lined baking sheet. Using your hands or the bottom of a drinking glass flatten balls into rounds. Place approximately 6 dough balls on each sheet.
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.