Prepare your dry ingredients. In a medium bowl, whisk together the flour, baking powder, and salt. Set aside.
Cream the butter and sugar. In a large bowl using an electric mixer, beat the butter and sugar together until light and fluffy, about 3-4 minutes. Don’t rush this step—proper creaming creates the perfect cookie texture.
Add the wet ingredients. Beat in the egg and vanilla extract until completely incorporated, scraping down the sides of the bowl as needed.
Incorporate the dry ingredients. Gradually add the flour mixture to the butter mixture on low speed, mixing just until combined. Overmixing will result in tough cookies.
Divide the dough. Split the dough into two equal portions. Add the peppermint extract and several drops of red food coloring to one portion, mixing until the color is evenly distributed and as vibrant as you’d like.
Chill the dough. Wrap each portion of dough separately in plastic wrap and refrigerate for at least 30 minutes. This makes the dough easier to handle and helps maintain the swirl pattern.
Roll out the doughs. On a lightly floured surface, roll each portion of dough into a rectangle about 1/4-inch thick. Try to make both rectangles approximately the same size.
Create the swirl. Place the red dough rectangle on top of the white dough rectangle. Starting from the long edge, tightly roll the dough into a log. If the dough becomes too soft, refrigerate for another 15 minutes before continuing.
Final chill. Wrap the log in plastic wrap and refrigerate for at least 1 hour or overnight. This prevents the cookies from spreading too much during baking.
Prepare for baking. Preheat your oven to 350°F (175°C) and line baking sheets with parchment paper.
Slice and optional coating. Unwrap the dough log and slice into 1/4-inch thick rounds. If desired, roll the edges of each cookie in crushed candy canes for extra peppermint flavor and festive appearance.
Bake to perfection. Place the cookies 2 inches apart on the prepared baking sheets and bake for 10-12 minutes or until the edges are just barely golden. The centers should still be soft.
Cool completely. Let the cookies cool on the baking sheet for 5 minutes before transferring to a wire rack to cool completely.