Heat oven to 350 ºF.
Beat butter in a large bowl until creamy. Blend in egg and vanilla. Add sugar and beat until light and fluffy.
Mix flour and baking powder in a separate bowl. Gradually beat in flour mixture to the above ingredients. Divide dough into 3 sections.
Sprinkle 2 TB of jello onto each section. Kneed together with dough. Add a few drops of food coloring to make more vibrant.
Shape dough into 1-inch balls. Roll balls into extra jello powder. Place 2 inches apart, on baking sheet. Flatten with bottom of glass.
Bake 8-10 minutes, or until edges are lightly brown. Cool on baking sheets 2 min. Remove to wire racks and cool completely.