Activate the yeast: In a large bowl, combine warm water, 1 tablespoon of the granulated sugar, and yeast. Stir gently and let sit for 5-10 minutes until foamy and activated.
Form the dough base: Add the remaining sugar, salt, egg, and evaporated milk to the yeast mixture. Whisk until well combined.
Incorporate the flour: Add 3 ½ cups of flour gradually, mixing after each addition. The dough should be soft but not sticky. Add the remaining ½ cup if needed.
Add butter and knead: Pour in melted butter and mix until incorporated. Turn dough onto a lightly floured surface and knead for 5-7 minutes until smooth and elastic.
Let the dough rise: Place dough in a greased bowl, cover with a clean kitchen towel, and allow to rise in a warm place for 1 hour or until doubled in size.
Roll and cut the dough: On a lightly floured surface, roll the dough to ¼-inch thickness. Using a pastry cutter or knife, cut into 2-inch squares.
Prepare the air fryer: Preheat your air fryer to 350°F. Cut parchment paper to fit your air fryer basket, then poke several holes in it for airflow.
Cook the beignets: Place beignets on the parchment paper in the air fryer basket, making sure they don’t touch. Lightly spray with oil. Cook for 4-5 minutes until golden brown and puffed.
Dust with sugar: Immediately transfer hot beignets to a plate and generously dust with powdered sugar on both sides while still warm.
Serve promptly: Enjoy while still warm for the best taste and texture!