1. Preheat oven to 350°F (175°C) and line 18 muffin cups with paper liners.

2. In a large bowl, cream butter and sugar for 3-4 minutes until light and fluffy.

3. Add eggs one at a time, beating well after each addition. Mix in vanilla extract.

4. In separate bowl, whisk together flour, baking powder, salt, nutmeg, and cinnamon.

5. Combine eggnog and milk in a measuring cup.

6. Alternately add dry ingredients and eggnog mixture to butter mixture, beginning and ending with flour mixture.

7. Fill cupcake liners ⅔ full with batter.

8. Bake for 18-22 minutes or until toothpick comes out with few moist crumbs.

9. Cool in pan 5 minutes, then transfer to wire rack to cool completely.

10. For frosting, beat cream cheese and butter until smooth, then gradually add powdered sugar, vanilla, and nutmeg.

11. Frost cooled cupcakes and sprinkle with additional nutmeg if desired.