In a large bowl, cream together the softened butter and sugar until light and fluffy. Beat in the egg and vanilla extract until smooth.
In a separate bowl, whisk together flour, baking powder, salt, and the Jello powder. Slowly add the dry ingredients to the wet mixture, stirring until a dough forms.
Wrap the dough in plastic wrap and chill for about 30 minutes. This helps the cookies hold their shape while baking.
Preheat oven to 350°F (175°C). Line a baking sheet with parchment paper. Scoop out dough and roll into 1-inch balls. If desired, roll each ball in extra Jello powder or sprinkles. Place on the baking sheet 2 inches apart and flatten slightly with the bottom of a glass.
Bake for 10–12 minutes, just until edges are set. Let cool on the pan for 5 minutes before transferring to a wire rack