Preheat oven to 300°F. In a medium bowl, combine flour, baking powder, cinnamon, and 1/2 tsp. nutmeg. Mix well with wire whisk and set aside. In a large bowl, cream sugar and butter with an electric mixer to form a grainy paste. Add eggnog, vanilla, and egg yolks and beat at medium speed until smooth. Add the flour mixture and beat at low speed just until combined. Do not over mix.
Drop by rounded teaspoons onto ungreased baking sheets, 1 inch apart. Sprinkle lightly with remaining 1 Tbsp. nutmeg.
Bake for 23-25 minutes or until bottoms turn light brown. Transfer to cool, flat surface immediately with a spatula.