Preheat the oven to 350 degrees. Line a muffin tin with 12 cupcake liners.

In a medium bowl combine the flour and baking powder. Set aside.

in a large bowl cream together the butter and sugar until well combined.

Add in the egg, vanilla, and nutmeg and mix well.

Add half the flour mixture to the butter mixture and mix until smooth.

Add in the milk and stir until just combined.

Mix in the remaining flour until just combined.

Fill the muffin cups 3/4 of the way full with the batter.

Bake for 22-25 minutes or until a toothpick inserted into the center comes out clean.

Remove from the oven and cool completely on a wire rack.

To make the frosting put the butter in a bowl and mix on high speed with a mixer until smooth.

Add in the powdered sugar, a half cup at a time, until desired consistency is reached.

Mix in the peppermint extract and milk.

Divide the frosting into two bowls. Color one of the bowls red.

Place the white frosting in one piping bag and the red frosting in another piping bag. Snip off the ends of each and place both inside a larger piping bag fitted with a tip.

Pipe a swirl frosting on each cupcake. Top with sprinkles if desired.