Preheat oven to 350 degrees F. Grease a 9×13 baking dish with non-stick cooking spray and set aside.
Using a medium bowl, whisk together the flour, baking powder, baking soda, salt, and nutmeg until well combined.
In the bowl of a stand mixer, cream the butter and sugar. Add the vanilla, and eggnog until well combined.
Beat in the eggs one at a time, scraping down the bowl as needed.
Gradually mix in the dry ingredients until just combined, being careful not to overmix.
Pour the batter into the baking dish, and smooth out the top.
Place into the oven and bake for 40-45 minutes or until a toothpick comes out clean when inserted into the middle. Set aside to cool for at least 3 hours.
Using a stand mixer with the whisk attachment, beat the butter until it turns white and creamy.
Turn the mixer to low speed and add the powdered sugar, along with the nutmeg and rum extract, then increase speed to medium and beat until smooth. Add the eggnog and continue to beat until the consistency is smooth and spreadable. Add a touch more egg nog if too thick.
Spread the frosting over the top of the cake.
Sprinkle the cake over either with holiday sprinkles or a light dusting of ground nutmeg.
Can I make egg nog cupcakes?Scoop this batter into cupcake liners that are placed in a muffin tin. Fill halfway and bake for approximately 15 minutes, check often for every oven is different.How to store:Store your eggnog cake in the fridge. Cover tightly with foil or with a 9x13 cover. This cake will last about 4 days in the fridge.