For the Red Velvet Cupcakes:
Preheat oven to 350°. Line 24 muffins cups with cupcake liners. Beat butter and sugars until fluffy. Add egg, one at a time, beating well after each addition. Carefully add food color (ONE BOTTLE AT A TIME), mix until combined; carefully add the second bottle. Beat until fully incorporated, add red velvet emulsion, beat until just incorporated.
In a medium bowl whisk together the flour, cocoa powder, baking soda and salt. Add flour mixture to butter mixture in thirds, alternating with buttermilk. Add vinegar and vanilla; beat just until blended. Divide batter evenly among cupcakes. Bake 18 to 20 minutes or until a wooden pick inserted into the center comes out clean. Let cool in pan on wire racks. Pipe Eggnog Frosting on cooled cupcakes and sprinkle with colored sugar.
For the Eggnog Frosting:
Once the eggnog is measured pour the eggnog flavor into the same container; set aside. Beat butter and cream cheese until smooth. Reduce mixer speed to low; gradually add confectioners' sugar and eggnog mixture. Occasionally scrape sides of bowl. Beat until blended.