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Step 1
Beat the butter with cream cheese. [both should be in room temperature]
Step 2
Start adding the flour gradually. Form the dough using a hand or food processor. Beat until the flour is incorporated and pulls away from the sides of the bowl. Do not overmix.
Step 3
Wrap the dough in the plastic wrap and chill for at least one hour (may be overnight).
Step 4
Preheat the oven to 356°F (180°C).
Step 5
Roll out the dough on a floured pastry board. It should be about ⅛'' thick.
Step 6
Cut into small squares (about 2-3'').
Step 7
Place the jam in the center of each square (½ teaspoon for each).
Step 8
Pinch the opposite corners of the squares to form the cookie.
Step 9
Place kolackys on the pan lined with baking paper.
Step 10
Bake for about 15-20 minutes.
Step 11
Cool off. If you want the cookies to be sweeter, sprinkle them with powdered sugar.