Preheat oven to 350 degrees F. Line baking sheet with parchment paper or a Silpat mat.
Cream together butter and cream cheese with electric mixer. Add the sugar and beat for 1 minute. Add the egg and beat to combine. Add extracts and beat until combined. Add the baking powder and flour, mixing until combined.
Once the dough is mixed together, refrigerate it for at least an hour.
Using a spring release scoop that holds 1 and 1/2 tablespoons of dough, scoop out cookies and place on the cookie sheet. Use the bottom of a glass dipped in flour to gently flatten the balls. Don't flatten too much or the cookies won't puff up.
Bake for 9-11 minutes. Watch closely and do not overcook. Pull them out of the oven when you see the underside edges turning golden! This might vary for your oven and altitude.
For the glaze
Combine the powdered sugar, lemon juice, and lemon zest in a small bowl. Whisk until smooth. Spoon about 1/2-teaspoon onto each cookie and use the back of the spoon to gently spread. Let the glaze harden for about 2 hours.