• Preheat the oven to 350°F (175°C).
• Line a 12-cup muffin tin with cupcake liners.
• In a medium bowl, whisk together the flour, baking powder, baking soda, and salt.
• In a large mixing bowl, beat the softened butter and sugar until light and fluffy, about 3–5 minutes.
• Add the eggs one at a time, mixing well after each addition.
• Stir in the vanilla extract.
• Gradually add the dry ingredients to the butter mixture, alternating with the coconut milk.
• Begin and end with the dry ingredients, mixing until just combined.
• Fold in the fresh lime juice and lime zest.
• Divide the batter evenly among the cupcake liners, filling each about two-thirds full.
• Bake for 18–20 minutes or until a toothpick inserted into the center comes out clean.
• Allow the cupcakes to cool in the pan for 5 minutes.
• Transfer to a wire rack and cool completely.

Make the Frosting

• Beat the butter and cream cheese together until smooth and creamy.
• Gradually add the powdered sugar, mixing on low speed until incorporated.
• Add the coconut milk, lime juice, lime zest, and coconut extract if using.
• Beat until light, fluffy, and smooth.
• Adjust consistency with additional powdered sugar or coconut milk if needed.

Assemble

• Frost the cooled Coconut Lime Cupcakes using a piping bag or spatula.
• Garnish with toasted coconut flakes and fresh lime zest.
• Serve and enjoy.