In a mixing bowl, whisk together 1 and ¾ cups of all-purpose flour, 2 teaspoons of baking powder, and a pinch of salt. Set aside.

In a stand mixer, combine ½ cup of softened unsalted butter and 1 cup of granulated sugar. Beat on medium speed for about 3-4 minutes until light and fluffy. Add in 1 cup of sweetened shredded coconut and mix well.

Crack in 2 large eggs one at a time, mixing thoroughly after each addition. Pour in 2 tablespoons of freshly squeezed key lime juice, 1 teaspoon of coconut extract, and the grated zest from one lime. Blend until smooth.

Gradually add the dry ingredient mixture to the wet mixture, stirring gently until just combined. Do not overmix.

Cover the mixing bowl with plastic wrap and refrigerate the cookie dough for about 20 minutes.

While the dough chills, preheat your oven to 350°F (175°C). Line two baking sheets with parchment paper.

Once chilled, use a cookie scoop to portion out the dough, rolling each scoop into a ball and coating in a mixture of powdered sugar and lime zest.

Place the rolled cookie balls on the baking sheets, spacing them about 2 inches apart. Bake for 12-15 minutes, until the cookies are puffed and edges feel set.

After baking, let the cookies cool on the pans for about 5 minutes before transferring to a wire rack.