Preheat oven to 350 degrees. Prepare cookies sheets by lining with parchment paper.
Cream butter and sugars together in a large bowl. Slowly add egg yolks and extracts then beat until creamy. Add eggnog and continue mixing until smooth. In a medium bowl, stir together flour, baking powder, nutmeg, cinnamon and salt. Add to creamed mixture and mix until well combined.
Scoop by heaping teaspoonfuls onto prepared cookie sheets. Bake for 10-12 minutes or until bottoms are just slightly browned. Leave on cookie sheets for 3-5 minutes then remove to wire racks and let cool completely.
While cookies are cooling, whisk powdered sugar and eggnog together. Place mixture in a small plastic resealable bag and snip corner. Drizzle icing back and forth across cookies then sprinkle with nutmeg.
Store in airtight cookie tin.