Preheat your oven to 350°F. Cream the butter with 1/2 cup of powdered sugar until light and fluffy, about 2-3 minutes. Add vanilla and lemon extracts, mix well. Gradually add flour and salt, stir until just combined. Fold in nuts if using.
Scoop tablespoon-sized portions of dough, roll into balls, and place on a baking sheet lined with parchment paper, leaving 2 inches apart.
Bake for 12-15 minutes until bottoms are lightly golden. Let cool on the sheet for 5 minutes.
Prepare the lemon cream filling by mixing softened cream cheese with lemon juice and powdered sugar. Set aside.
Once cookies are cool, press a thumb into the center of each cookie, fill with lemon cream, and roll in remaining powdered sugar.