Preheat the oven to 350°F (175°C). Line a baking sheet with parchment paper or a silicone baking mat or lightly grease it.
In a mixing bowl, beat the softened butter, softened cream cheese, lemon extract, and egg with a hand mixer until the mixture is light and fluffy.
Add the lemon cake mix to the bowl and beat until a smooth, cohesive dough forms.
Cover the dough and chill in the refrigerator for 30 minutes to make it easier to handle and to prevent spreading.
Place about 1/2 cup powdered sugar in a small bowl. Using a cookie scoop or spoon, form the dough into 1/2–1 inch balls and roll each ball in the powdered sugar to coat.
Arrange the coated dough balls on the prepared baking sheet spaced about 2 inches apart.
Bake for 12–13 minutes, until set but not browned.
Let the cookies cool on the baking sheet for a few minutes, then transfer to a cooling rack. If desired, sift additional powdered sugar over the tops before serving.