Preheat your oven to 350°F (175°C) and line a standard muffin pan with cupcake liners.

In a large mixing bowl, combine granulated sugar and lemon zest, massaging the zest into the sugar for 1-2 minutes.

In a medium bowl, whisk together sour cream, water, oil, egg, lemon extract, and vanilla extract until smooth.

In another bowl, sift together cake flour, poppy seeds, baking powder, and fine salt. Fold into the wet ingredients until no dry flour remains.

Fill each cupcake liner ¾ full with the batter and bake for 18-21 minutes. Check for doneness with a toothpick.

Allow the cupcakes to cool in the pan for about 10 minutes, then transfer to a wire rack to cool completely.

For the frosting, beat butter and cream cheese until smooth. Mix in lemon zest, vanilla, and gradually add powdered sugar and lemon juice.

Optionally, hollow out the center of each cooled cupcake and fill with lemon curd, then pipe frosting on top.

Garnish with a sprinkle of lemon zest and serve.