In the bowl of a stand mixer or in a large bowl with a electric mixer, cream the softened butter and sugar together. This should take about 2 minutes.
1/2 cup unsalted butter, 1 cup granulated sugar
Add the egg and vanilla to the mixing bowl and mix until well combined.
1 large egg, 1 teaspoon vanilla extract
In another bowl, combine the flour, baking soda, baking powder and salt. Whisk to combine.
1 3/4 cups all purpose flour, 1/2 teaspoon baking soda, 1/2 teaspoon baking powder, 1/2 teaspoon salt
Add the dry ingredients to the sugar and butter mixture and mix until just combined. Avoid over-mixing the cookie dough here.
Place the colored sugar in separate shallow bowl or on plates. Using a small cookie scoop, roll the sugar cookie dough into balls. Roll in sugar sprinkles and place onto a parchment lined plate or baking sheet.
Red sugar sprinkles, Green sugar sprinkles
Once all the cookies are rolled in sprinkles, place them in the freezer for about 20 minutes. This is a great time to preheat your oven to 350°.
After the dough balls have chilled, bake at 350° for 12-15 minutes, or until the cookies have crinkles in the top and the sides are set. Remove from the oven and transfer to a wire cooling rack.
Because these cookies are soft, you should allow them to cool for about 10 minutes on your baking sheet after removing them from the oven. Then you can transfer the cookies to a wire rack to cool completely.
Notes
Be sure you don't overmix the cookie dough or it could cause your cookies to become too dense.