In a large bowl, cream the butter and 1 1/2 cups sugar, eggs and rum extract until light and fluffy.
Sift together the flour, baking powder and salt and gradually mix it into the creamed ingredients until fully combined and smooth.
In a small bowl mix together the remaining sugar and nutmeg. Roll the dough into 1 inch balls and toss the balls in the sugar mixture until the entire ball is coated in sugar and nutmeg.
Place the balls 2 inches apart on a cookie sheet lined with parchment paper.