With a hand mixer or a stand mixer with the paddle attachment, beat the softened cream cheese, softened butter, and vanilla extract in a large mixing bowl on medium-high speed until light and fluffy.
Reduce the speed to low and slowly add the powdered sugar to the cream cheese mixture. Scrape down the sides of the bowl with a rubber spatula and beat again.
Add the thawed Cool Whip and mix on medium speed until you get soft peaks. You will have a light and fluffy consistency. Transfer to a piping bag if desired.
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Notes
This will generously frost 2 dozen cupcakes (with some to spare) or lightly frost 3 dozen cupcakes.For a thicker and sweeter frosting, add another one to two cups of powdered sugar. Transfer leftover frosting into an airtight container.Storage: Refrigerate the container immediately after use. Use within one week or freeze for up to 2 to 3 months.