Preheat the oven to 350ºF (177ºC) and line a cupcake tin with liners.
In a mixing bowl whisk together the flour (1 3/4 cups), baking powder (1 3/4 teaspoons), baking soda (1/2 teaspoon), salt (1/2 teaspoon), and cinnamon (2 tablespoons).
In the bowl of a stand mixer fitted with a paddle attachment cream together the sugar (1 cup) and butter (8 tablespoons) for 3-4 minutes until light and fluffy. Add the eggs (2) and mix again until well combined. Add in the sour cream (1/3 cup), milk (2/3 cup), and vanilla extract (2 teaspoons) and mix until combined. Add the dry ingredients and mix until just combined. The batter will be runny.
Fill each cupcake liner 2/3 full of batter. Bake for 12-15 minutes or until a toothpick inserted comes out with a few moist crumbs.
Let the cupcakes cool in the tin on a wire cooling rack for about 4-5 minutes before removing them to finish cooling completely on the cooling rack before frosting.
Cinnamon Sugar:
Mix the sugar (1/2 cup) and cinnamon (2 tablespoons) together in a small bowl.
Once the cupcakes have cooled, use a pastry brush to brush a cupcake with melted butter (2 tablespoons) lightly and immediately dip the cupcake into the cinnamon sugar. Continue until all cupcakes are coated.
Reserve extra cinnamon sugar for sprinkling on top of the cupcakes.
Frosting:
In the bowl of a stand mixer fitted with a paddle attachment, whip the cream cheese (8 ounces) and butter (8 tablespoons) together until light and fluffy. Add the vanilla (2 teaspoons), cinnamon (1/2 tablespoon), and powdered sugar (4 1/2 cups), and mix on low for a minute before mixing on high for a minute or 2 until the frosting is thick and creamy. If you want your frosting thicker, add ¼-1/2 cup more powdered sugar.
Frost each cupcake with an open star tip and sprinkle more cinnamon sugar on top of the cupcakes. Drizzle with caramel sauce or dulce de leche, if desired.
Notes
Use freshly ground cinnamon. It makes a surprising difference in aroma and flavor—warm and sweet, never bitter.
Make the frosting extra fluffy. Beat the butter and cream cheese for at least 3–4 minutes before adding sugar. The extra air makes it cloud-like and pipeable.
Don’t skip the cinnamon sugar dip. That’s where the “churro” magic happens! Brush lightly with butter and immediately dip so it adheres perfectly.
Add a pinch of salt to your cinnamon sugar. It enhances the sweetness and deepens the spice flavor.
For a showstopper finish: drizzle a bit of caramel sauce or dulce de leche in a zigzag pattern—just like a bakery cupcake!