Heat oven to 350°F. Line 12 regular-size muffin cups with paper baking cups.
In medium bowl, stir together all cupcake ingredients except butter, eggs and eggnog.
In large bowl, beat butter until creamy (about 1 minute). Add flour mixture and beat until mixture resembles fine crumbs. Add eggs and beat for 1 minute - batter should be light in color and a bit fluffy. Scrape bowl; gently beat in 1/2 cup eggnog just until combined and batter is silky and smooth.
Divide batter evenly among 14 muffin cups. Bake for 18-22 minutes until tops are golden and an inserted toothpick comes out clean. Allow to cool completely.
For the frosting, combine butter, cream cheese, vanilla, nutmeg, and cinnamon and beat until smooth. Add powdered sugar, 1 up at a time, and mix to combine. Add eggnog 1 tablespoon at a time and mix until frosting is spreadable. Spread or pipe onto cooled cupcakes. Store in airtight container at room temperature.