1. Preheat oven to 350°F (175°C) and position a rack in the middle.
2. Line a 12-cup muffin tin with greaseproof or paper liners.
3. In a medium bowl, whisk together sifted flour, baking powder, baking soda (if using), and salt.
4. In a large bowl, beat butter and sugar until light and fluffy. Add eggs one at a time, mixing well after each addition.
5. Add vanilla extract, lime zest, and key lime extract (if using), and beat briefly.
6. On low speed, alternately add about half the flour mixture and half the milk (or sour cream), beginning and ending with flour, mixing just until combined to avoid overmixing.
7. Fold in key lime juice gently with a spatula for bright lime flavor.
8. Portion batter evenly into liners, filling about two-thirds full for even rising without domed or overflowing tops.
9. Bake 16 to 25 minutes depending on the recipe variation, until the tops spring back lightly to the touch and a toothpick inserted in the center comes out clean.
10. Allow cupcakes to cool in the pan for 5–10 minutes, then transfer to a wire rack to cool completely before frosting.
11. For the frosting, beat cream cheese and butter on medium speed until smooth and creamy.
12. Gradually add powdered sugar, beating on low speed until fully incorporated, then increase speed and beat until light and fluffy (about 2 minutes).
13. Add key lime juice, zest, salt, and key lime extract (if using), and beat until smooth. Adjust consistency with a teaspoon of milk or heavy cream if frosting is too thick.
14. Optionally, tint a small portion of frosting with green and yellow food coloring and chill before piping a two-tone swirl effect on the cupcakes.
15. Pipe or spread frosting onto cooled cupcakes and garnish with a pinch of fresh key lime zest.