1. Prepare Your Baking Setup

Before diving into the batter, preheat your oven to 350°F or 175°C. Line a mini muffin tin with cupcake liners. This ensures the cupcakes bake evenly and release easily without sticking.

Preparing everything ahead of time helps streamline the process. Make sure your butter, cream cheese, and eggs are all at room temperature. This step is essential for achieving a smooth batter and frosting.

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2. Combine the Dry Ingredients

In a medium mixing bowl, sift together the cake flour, baking powder, baking soda, salt, and nutmeg. Sifting is not just for removing lumps. It aerates the flour and ensures that the leavening agents are evenly distributed.

Nutmeg is the star spice here. It provides that signature eggnog flavor, so make sure it is evenly incorporated throughout the flour mixture.

Set this bowl aside once combined.

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3. Cream the Butter, Oil, and Sugar

In a large mixing bowl, beat together the granulated sugar and unsalted butter until light and fluffy. This process usually takes about 2 to 3 minutes using a hand mixer or stand mixer.

Next, add the vegetable oil and continue mixing. The combination of butter and oil gives the cupcakes both flavor and moisture. Butter adds richness while oil ensures the cupcakes stay soft even after cooling.

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4. Add Eggs and Flavoring

Add the eggs one at a time, mixing well after each addition. This helps maintain a stable emulsion and prevents the batter from curdling.

Once the eggs are fully incorporated, add the vanilla extract. This enhances the overall flavor and complements the eggnog and nutmeg beautifully.

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5. Incorporate Eggnog and Dry Ingredients

Now comes the key step. Alternate adding the dry ingredients and eggnog into the batter. Start with a portion of the dry mixture, then add some eggnog, and continue this process until everything is combined.

Mix on low speed and avoid overmixing. Overmixing can lead to dense cupcakes instead of light and fluffy ones.

At the end of this step, you should have a smooth, slightly thick batter with a creamy consistency.

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6. Fill the Cupcake Liners

Using a small scoop or spoon, fill each mini cupcake liner about 3/4 full. This gives the cupcakes enough room to rise without overflowing.

Make sure the batter is evenly distributed so all cupcakes bake uniformly.

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7. Bake the Cupcakes

Place the muffin tin in the preheated oven and bake for about 10 to 12 minutes. Keep a close eye on them since mini cupcakes bake quickly.

You will know they are done when a toothpick inserted into the center comes out clean or with just a few crumbs.

Remove them from the oven and allow them to cool in the pan for a few minutes before transferring them to a wire rack to cool completely.

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8. Prepare the Cream Cheese Frosting

While the cupcakes are cooling, prepare the frosting. In a mixing bowl, beat together the softened cream cheese and butter until smooth and creamy.

Gradually add the confectioners sugar, mixing slowly at first to avoid a mess, then increasing the speed once incorporated.

Add the vanilla extract, nutmeg, and eggnog. Continue mixing until the frosting is smooth, fluffy, and spreadable.

The frosting should be thick but soft enough to pipe or spread easily.

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9. Frost the Cupcakes

Once the cupcakes are completely cool, frost them using a piping bag or a spatula.

You can create simple swirls or more decorative designs depending on your preference. A light dusting of nutmeg on top can add a beautiful finishing touch.