Preheat the oven to 350°F (175°C). Line baking sheets with parchment paper.
In a large bowl, beat the butter and sugar until creamy.
Add vanilla extract and egg; mix until smooth.
In another bowl, whisk together flour, cornstarch, baking powder, baking soda, and salt.
Gradually add dry ingredients to the wet ingredients. Mix until combined.
Gently fold in rainbow sprinkles.
Roll dough into 1-inch balls and place on prepared baking sheets, leaving space between each.
Bake for 10-12 minutes or until the edges are lightly golden.
Remove cookies from the oven and let them cool on a wire rack.