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1
Preheat oven to 350 degrees F (175 degrees C). Line a 12-cup muffin pan with paper cup liners.
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2
Stir together flour, baking powder, nutmeg, baking soda, and salt in a bowl. Cream butter, 3/4 cup plus 2 tablespoons sugar, and vanilla in a large bowl with an electric mixer until well combined. Add egg whites, one at a time, beating well after each addition. Alternately add half of the flour mixture, all the buttermilk, and remaining flour mixture, beating after each addition until just combined.
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3
Spoon batter into prepared muffin cups, filling each about 3/4 full, and smooth tops with the back of a spoon.
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4
Bake until a toothpick inserted into the centers comes out clean, 15 to 20 minutes. Cool in the pan for 5 minutes. Remove from the pan and cool completely on a wire rack, about 30 minutes.
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5
Meanwhile, make frosting. Blend cream cheese, butter, lemon juice, and lemon zest with an electric mixer until light and fluffy. Gradually beat in powdered sugar to reach a spreading consistency.
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6
Frost cooled cupcakes and decorate with luster dust and sanding sugars.
