Cream together 8 Tbsp (1 stick) butter and 1 cup sugar on medium speed with handheld mixer. Beat in 1 egg, 1 tsp butter extract, ½ tsp baking powder, and ½ salt.
Add 1½ cups flour and mix until dough comes together.°
Add ¼ cup rainbow sprinkles to the dough and mix until evenly distributed.
Roll dough into teaspoon size balls and dip tops in rainbow nonpareil sprinkles.
Set on lined baking sheet several inches apart. Bake 8-10 minutes, and remove from oven before edges start to brown.
Let sit 2 minutes before transferring to rack to cool. Will remain fresh 1 week, covered at room temperature.