Preheat the oven to 375 degrees F.

In a large bowl cream together the butter and 1 cup of sugar. Add egg and vanilla and beat until blended.

In a separate bowl, sift together the flour, salt, baking powder and cinnamon. Add to the wet ingredients and mix well until a nice dough forms.

Mix 1/4 cup sugar and 1 tablespoon cinnamon together in a shallow dish (like a pie plate) and set aside.

Divide dough and roll into balls about 2 tablespoons in size. (Using a cookie scoop is very helpful for this). Flatten each ball of dough with the palm of your hand and place a caramel in the center. Wrap the dough completely around the caramel and roll into a ball again. Roll in the cinnamon sugar mixture and place on an ungreased cookie sheet about 2 inches apart.

Bake for 10-12 minutes. Cool on cookie sheets for a few minutes, then transfer to a cooling rack to cook completely.

Store in a tightly sealed container for up to one week. Do not refrigerate as it will harden the caramel.