Preheat oven to 350°F and line a cupcake pan with liners.
Cream the unsalted butter and sugar together until light and fluffy, about 3-4 minutes.
Add sour cream and vanilla extract and mix until combined.
Add egg whites in two batches, mixing well after each addition; scrape the bowl as needed.
In a separate bowl, combine flour, baking powder, nutmeg, and salt.
Combine eggnog and water in a small cup.
Add half of the dry ingredients to the batter and mix until combined, then add the eggnog mixture and mix again. Add the remaining dry ingredients and mix well.
Fill cupcake liners halfway and bake for 15-17 minutes, or until a toothpick inserted comes out with a few crumbs.
Remove cupcakes from oven and cool in the pan for 2-3 minutes, then transfer to a wire rack to cool completely.
For the frosting, beat salted butter and shortening until smooth.
Add 2 cups of powdered sugar and mix until smooth.
Dissolve instant espresso in hot water and add half to the frosting, mixing until smooth.
Add the remaining powdered sugar and mix until smooth.
Add the remaining espresso mixture and eggnog as needed until reaching desired frosting consistency.
Pipe frosting onto cooled cupcakes and sprinkle with nutmeg if desired.
Notes
These festive cupcakes combine the rich flavors of eggnog and espresso for a perfect holiday treat. Store leftover cupcakes in an airtight container at room temperature for up to 3 days.