Preheat your oven to 375°F and line two baking sheets with parchment paper. Cream together the softened butter and granulated sugar for about 2 minutes until it's pale and fluffy—don't skip this step because it adds air to your dough. Beat in the eggs one at a time, then add vanilla bean paste and lemon zest and mix until combined.
In a separate bowl, whisk together the flour, baking powder, and salt. Add this dry mixture to your wet ingredients and stir until you've got a soft dough that comes together. Pour in the milk and fold gently until everything's evenly mixed—don't overmix or your Easter sugar cookies recipe will turn out tough.
Roll the dough between two pieces of parchment paper until it's about 1/8 inch thick. This prevents sticking and honestly saves so much cleanup (trust me, I learned this the hard way). Use your favorite cookie cutters—bunny shapes, eggs, flowers—whatever screams spring to you.
Transfer cut-out cookies to your prepared baking sheets, leaving about an inch between each one. Bake for 10-12 minutes until the edges are just barely golden—the tops should still look pretty pale. Don't panic if they look slightly underbaked in the center; they keep cooking on the sheet for a minute after you pull them out.
Let the cookies cool on the baking sheet for exactly 3 minutes, then transfer them to a wire rack. They'll firm up as they cool, and trying to move them too early makes them tear. I usually set a timer because I always forget otherwise and end up with crumbled cookies.
Make your royal icing by whisking together the powdered sugar, water, and cream cheese until you get a smooth, spreadable consistency. Add your gel food coloring and mix until the color's even throughout. If it's too thick, add water one teaspoon at a time; if it's too thin, add more powdered sugar.
Spread or pipe the royal icing onto cooled cookies, then immediately add sprinkles before it dries. This is where kids absolutely lose their minds with creativity—my daughter made Easter eggs that looked like abstract art last year and honestly they were perfect. Let the icing set for about 30 minutes before serving or storing.