Preheat your oven to 350 degrees Fahrenheit. Line a baking sheet with parchment paper and set aside.
In a mixing bowl, use an electric hand mixer (or a stand mixer with a paddle attachment) to cream together the softened butter and granulated sugar until light and fluffy.
Add in the egg and vanilla extract and beat again until combined. Do not overmix.
Add in the all purpose flour, baking powder, baking soda, and salt. Mix by hand until a soft dough forms. Add the rainbow sprinkles and mix again until they are evenly dispersed.
Scoop out the dough into 1 Tbsp balls (using a #60 cookie scoop) and roll the balls in additional granulated sugar.
Place the cookie dough balls on the prepared baking sheet and bake for 9-11 minutes or until the edges are set and the tops are slightly puffed.
Once they are done baking, allow the cookies to cool on the cookie sheet for about 5 minutes before removing them to a cooling rack and cooling the rest of the way. Enjoy!