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Preheat oven to 350 degrees.
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Line a 12-cup muffin tin with cupcake liners; set aside.
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In a medium bowl, whisk together flour, baking powder, and salt; set aside.
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In a small bowl, mix together milk, vanilla, key lime zest and 1 tbsp of lime juice; set aside.
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In the bowl of an electric mixer fitted with the paddle attachment, cream butter on medium-high speed, until light and fluffy.
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Gradually add sugar and continue to beat until well combined and fluffy.
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Reduce the mixer speed to medium and slowly add egg and egg whites until just blended.
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With the mixer on low, slowly add half the flour mixture; mix until just blended.
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Add the milk mixture; mix until just blended.
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Slowly add remaining flour mixture, scraping down sides of the bowl with a spatula, as necessary, until just blended.
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Divide batter evenly among prepared muffin cups.
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Transfer muffin tin to oven and bake until tops are just dry to the touch, 22 to 25 minutes.
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Transfer muffin tin to a wire rack and let cupcakes cool completely.
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For the frosting, beat together butter and salt on medium speed until light and fluffy.
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Reduce mixer speed and slowly add confectioners' sugar; beat until well combined.
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Add vanilla, key lime juice and zest; mix until just blended.
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Frosting consistency should be dense and creamy, like ice cream. Frosts over one dozen.