Prep your space: Preheat the oven to 350°F (175°C). Line two baking sheets with parchment paper. Set out your cutters and decorations.
Mix dry ingredients: In a bowl, whisk the flour, baking powder, and salt. Set aside.
Cream butter and sugar: In a large bowl, beat the softened butter and sugar with a hand mixer or stand mixer until light and fluffy, about 2–3 minutes.
Add egg and vanilla: Beat in the egg and vanilla until fully combined. If the dough seems dry later, you’ll add the milk, but hold off for now.
Combine wet and dry: Add the dry ingredients to the butter mixture in two additions. Mix on low until a soft dough forms. If it looks crumbly, add up to 1 tablespoon of milk to bring it together.
Roll the dough: Lightly flour your work surface. Roll the dough to about 1/4 inch thickness. Avoid over-flouring; a little stickiness is okay.
Cut the paw bases: Use the large round cutter to cut circles. Place them on the prepared baking sheets, spacing them about 2 inches apart.
Create the paw prints: Use the small round cutter to press a gentle indent near the bottom edge of each circle for the heel pad. Use the smallest round tool to press three smaller indents above it for the toes. Don’t cut through; just make impressions.
Bake: Bake 9–11 minutes, until the edges look set but not browned. The cookies should remain pale for a soft, tender bite.
Cool: Let the cookies rest on the baking sheet for 5 minutes, then move them to a wire rack to cool completely.
Decorate the paws: If using icing, whisk 1 cup powdered sugar with 1–2 tablespoons milk until smooth. Tint pink. Pipe or spoon icing into the heel and toe indents. If using candies or marshmallows, dab a bit of icing as “glue,” then press them into place. Sprinkle with pink sanding sugar if desired.
Set and serve: Allow icing to set for 30–60 minutes before stacking or packaging.