Preheat the Oven and Prepare the Cupcake Pan. Preheat your oven to 350°F. Line a muffin tin or spray with non-stick spray.
Mix the Dry Ingredients. In a bowl, whisk together the all-purpose flour, baking powder, salt, and lime zest.
Cream the Butter and Sugar. In a separate bowl, use a hand mixer or stand mixer to cream together the unsalted butter and granulated sugar for 2-3 minutes until the mixture is light and fluffy.
Add the Wet Ingredients. Add the eggs, lime juice, tequila, and orange liqueur to the butter and sugar mixture. Beat until smooth.
Combine the Wet and Dry Ingredients. Add the dry ingredients to the wet ingredients in two parts, alternating with the milk. Mix until just combined, being careful not to overmix.
Bake the Cupcakes. Divide the batter evenly, filling each about 2/3 full. Bake for 18-20 minutes, or until a toothpick inserted into the center of the cupcakes comes out clean. Allow the cupcakes to cool in the pan for 5 minutes before cooling on a wire rack.
Make The Frosting
Prepare the Butter. Beat the softened butter on medium speed using an electric mixer for about 2-3 minutes until it's smooth.
Add the Lime Zest and Juice. Add the lime zest and fresh lime juice to the butter and continue mixing until well combined.
Add the Powdered Sugar. Gradually add the powdered sugar, 1 cup at a time, beating on low speed. Once all the powdered sugar is incorporated, turn the mixer speed to medium and beat until smooth and fluffy.
Adjust Consistency. If the frosting is too thick, add heavy cream or milk, one tablespoon at a time, until it reaches your desired consistency. If it’s too thin, add a little more powdered sugar until it thickens up.
Add Vanilla and Salt. Stir in the vanilla extract and a pinch of salt to balance the sweetness.
Beat Until Fluffy. Beat the frosting on high speed for an additional 2-3 minutes until it’s light and fluffy.
Garnish and Serve. Garnish with a lime wedge or a sprinkle of lime zest.