Preheat oven to 375 degrees. Sift together dry ingredients and set aside.
Cream butter and sugar in large bowl until fluffy. Add eggs, milk, flavoring, and E-Z Gel and beat until light. Stir in dry ingredients to make a soft dough. Refrigerate for 5 minutes. Add additional flour if needed. Roll out 1/4 inch thick and sprinkle with colored sugar (if desired). Cut into shapes. Arrange on an ungreased baking sheet and bake for 8-10 minutes until edges are barely browned.
Store in airtight container or freeze. If desired, omit sugar on top and frost with buttercream or royal icing.