Preheat your oven to 350°F (175°C).
Cream together 1 cup of softened unsalted butter and 1 cup of granulated sugar until light and fluffy, about 2-3 minutes. Add 1 large egg and 2 teaspoons of vanilla extract, mixing until well blended.
In a separate bowl, whisk together 1 and ½ cups of all-purpose flour, 1 teaspoon of baking soda, 1 teaspoon of baking powder, and ½ teaspoon of salt. Gradually add this dry mixture to the wet ingredients, mixing until just combined.
Gently fold in ½ cup of funfetti until evenly distributed throughout the dough.
Using a cookie scoop, portion out the dough into a greased muffin tin, filling each cup about 2/3 full. Press down gently to create a small indent in the center of each cookie.
Bake the cookie cups for 10-12 minutes or until the edges are lightly golden.
Allow the cookie cups to cool in the pan for about 5 minutes before transferring them to a cooling rack to cool completely.
In a clean mixing bowl, beat 1 cup of softened unsalted butter until creamy. Gradually add 3 to 3.5 cups of powdered sugar, 1 teaspoon of vanilla extract, and 1 tablespoon of heavy whipping cream. Beat until light and fluffy, about 3-5 minutes.
Once the cookie cups have cooled completely, generously frost each cup with the vanilla frosting and top with extra funfetti.
