Preheat oven to 350° F. Grease light colored baking sheets with non stick cooking spray, line with parchment paper or use silicone baking mat and set aside.
Place Red Hots into a plastic food storage bag and crush using a rolling pin. Set aside.
In a large bowl, cream butter and sugar together with a hand mixer (or stand mixer) until light and fluffy. Whip in vanilla and egg. Scrape sides and mix again.
Place all ingredients (excluding the powdered sugar) in a small bowl and give them a stir to combine. Add them into the bowl of wet ingredients and slowly mix until just combined. Scrape sides of bowl and mix again briefly.
Stir in crushed candy.
Pour powdered sugar onto a large plate. Roll a heaping teaspoon of dough into a ball and roll in powdered sugar. Place on baking sheet and repeat with remaining dough.
Bake for 9-11 minutes* or until bottoms begin to barely brown and cookies look matte (not melty or shiny). Remove from oven and cool cookies about 3 minutes before transferring to cooling rack.
Notes
*If using a darker nonstick baking tray, reduce baking time by about 2 minutes.