Preheat the oven to 350°F (175°C) and line a muffin tin with cupcake liners.
Prepare the dry ingredients: In a medium bowl, whisk together flour, baking powder, baking soda, salt, and lemon zest.
Cream butter and sugar: In a large bowl, beat butter and sugar until light and fluffy (about 3 minutes). Add the egg and mix until combined.
Alternate adding wet and dry ingredients: Gradually add milk mixed with lemon juice, then the dry ingredients, mixing just until combined.
Fill cupcake liners: Spoon batter into the liners, filling each about 3/4 full.
Bake for 18-22 minutes or until a toothpick inserted into the center comes out clean. Cool completely on a wire rack.
Make frosting: Beat together cream cheese and butter until smooth. Add powdered sugar, lemon zest, and lemon juice, and beat until creamy.
Frost the cupcakes: Once the cupcakes are completely cooled, frost with the lemon cream cheese frosting.