Mix together the flour, baking powder, and salt. Set aside.
Mix the butter and cream cheese in the bowl of a stand mixer fitted with a paddle attachment. Beat on medium speed until the mixture sticks to the side of the bowl. Add the sugar and beat until creamy.
Add the egg and vanilla extract and beat for 1 minute to combine.
Add in the dry ingredients and mix on low speed until the dry ingredients until incorporated. The dough will be a bit sticky.
Form the dough into a ball and wrap in plastic wrap. Refrigerate for at least 1 hour. The dough must be firm and thoroughly cold for best results.
Before baking the cookies, preheat the oven to 350°F. Line 2 baking sheets with parchment paper or a silicon baking mat.
Form small balls with 1 tablespoon of dough. Roll each ball in the green sugar crystals. Space them out on the baking sheet. Press them down lightly with the bottom of a drinking glass.
Bake for 13-15 minutes. They should be lightly brown around the edges.
Pull the cookies out of the oven and immediately press the red heart into the center.