Begin by whisking together 2 cups of all-purpose flour, 1 teaspoon of baking powder, and ¼ teaspoon of salt in a large mixing bowl. Set aside.

In the bowl of a stand mixer, cream together ½ cup of softened unsalted butter and 1 cup of granulated sugar until fluffy, about 3 to 4 minutes. Gradually add in 2 large eggs, 3 tablespoons of key lime juice, 1 teaspoon of coconut extract, and half of the lime zest. Mix until fully incorporated.

Gradually add the prepared dry ingredients to the wet mixture until just combined. Be careful not to overmix.

Cover the mixing bowl with plastic wrap and refrigerate the dough for about 20 minutes.

Preheat your oven to 350°F (175°C). Prepare your baking sheets with parchment paper.

In a shallow bowl, combine ½ cup of powdered sugar with the remaining lime zest. Once the dough has chilled, scoop and roll into balls, coating each ball in the sugar mixture.

Place the coated dough balls onto the baking sheets, leaving about 2 inches between them. Bake for 12-15 minutes until puffed and edges appear set.

Allow cookies to cool on the baking sheets for 5 minutes before transferring to a wire rack.