Preheat the oven to 350°F (175°C) and line two baking sheets with parchment paper.
In a large bowl, beat the cream cheese, butter, egg, and vanilla extract with an electric mixer until smooth.
Add the cake mix and stir until a thick dough forms.
Gently fold in the holiday sprinkles, being careful not to overmix to avoid color bleeding.
Chill the dough in the refrigerator for at least 30 minutes to make it easier to handle.
Scoop the dough into 1½-inch balls and roll each one in powdered sugar until fully coated.
Place the dough balls on the prepared baking sheets, spacing them about 2 inches apart.
Bake for 10–12 minutes, or until the edges are set and the centers are slightly soft.
Let the cookies cool on the baking sheet for a few minutes before transferring them to a wire rack to cool completely.
Notes
Storage: Store in a single layer in an airtight container at room temperature for up to 3 days.
Freezing: Freeze in an airtight container or freezer-safe bag for up to 3 months. Thaw at room temperature before serving.