COMBINE flour, baking powder and salt in small bowl. Beat sweetened condensed milk and butter in large bowl with electric mixer on low speed until smooth. Beat in 1 cup powdered sugar, egg and vanilla. Add flour mixture gradually. Beat on low speed until combined. Divide dough into fourths. Wrap each with plastic wrap. Chill 2 hours.

HEAT oven to 350°F. Line baking sheets with foil or parchment paper. Sprinkle counter surface with powdered sugar. Roll out one portion of dough at a time to 1/8-inch thickness. Cut with 3-inch cookie cutters. Cut out holes for "stained glass" effect in each cookie with small cookie cutters. Place 2 inches apart on baking sheets. Fill holes with crushed hard candies in various colors. Chill and reroll dough as needed.

BAKE 6 to 8 minutes or until candy has melted. Cool completely. Remove carefully from foil or parchment paper.