If frosting seems too thick, beat in additional milk, ½ teaspoon at a time. If frosting is too thin, add powdered sugar, ¼ cup at a time. If you plan on piping the frosting, you'll want to make it a little thicker.
Cakes or cupcakes should be completely cool before frosting. Spread on the cake using a offset spatula, or pipe it onto cupcakes using a pastry bag or ziptop bag with the corner snipped off.
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Notes
Cream cheese: I usually use regular full fat cream cheese (8 ounce box) but reduced-fat will work. Avoid using fat-free cream cheese because it contains added ingredients like stabilizers, sugar, and preservatives.
Softening cream cheese: The easiest way to soften cream cheese is to leave it on the counter for a couple of hours. If you forget to take your cream cheese out ahead of time to soften, unwrap the block of cream cheese and cut it into small chunks, spreading them apart on a plate. The small chunks will warm up and soften much more quickly than a big block of unwrapped cheese.
Yield: Makes 3 cups, enough to frost a 2 layer cake. I often cut the recipe in half to frost a 9 x 13-inch cake but if you like a nice thick layer of frosting, make a whole batch.
Make ahead: Make the frosting up to a day ahead and refrigerate. Take the frosting out of the fridge an hour before you want to use it so it comes to room temperature. It will soften slightly and be easier to spread. Stir well before using.
Storage: Store leftover cream cheese frosting in the refrigerator for up to three days. Cakes frosted with cream cheese frosting should be refrigerated, too.
To freeze frosting: Freeze extra cream cheese frosting in resealable freezer bags, removing any extra air as you seal the bag. Label the freezer bag and use the frosting within a month. Defrost the frosting overnight in the refrigerator. Snip a corner from the bag and pipe the frosting right from the bag onto cupcakes or cake. If the frosting separates slightly, remove it from the bag and stir or beat the frosting until it's creamy.