1. Beat butter, sugar, egg, extracts and salt in a large bowl with mixer on medium speed until creamy. On low speed, beat in flour until blended. Divide dough in half; shape each into a 1-in.-thick disk and wrap separately in plastic. Chill 1 hour or until firm.
2. Line 2 baking sheets with parchment paper, nonstick foil or reusable nonstick liners. On floured surface, roll out 1 disk at a time (keep other refrigerated) to 1/8-in. thickness. Using a floured square cutter, cut out 35 squares; place on one baking sheet, 1 in. apart. Chill in refrigerator 10 minutes. Heat oven to 350 F. Remove baking sheet from refrigerator and bake 8 to 10 minutes until edges are lightly golden. Cool on wire rack.
3. Roll out remaining dough and cut out 35 more squares. Using floured alphabet cutters (the letters J, O, Y, N, E and L), cut out 5 sets of JOY and 5 sets of NOEL from centers of squares; move squares to second prepared baking sheet and chill 10 minutes. Bake 7 to 8 minutes, or until bottoms and edges are lightly browned. Cool on sheet on wire rack 2 minutes; move to rack to cool completely.
4. To assemble: Spread jam on bottoms of whole cookie squares; top with a cutout letter cookie and sandwich together. Dust faces of cookies with confectioners sugar.