Step 1: Pulse the toasted hazelnuts in a food processor until they are finely ground, being careful not to turn them into nut butter.
Step 2: In a medium bowl, whisk together the ground hazelnuts, flour, cinnamon, and salt.
Step 3: In a large bowl, cream together the softened butter and sugar until light and fluffy, about 3 minutes.
Step 4: Beat in the egg and vanilla extract until well combined.
Step 5: Gradually add the dry ingredients to the butter mixture, mixing on low speed until the dough just comes together.
Step 6: Divide the dough into two equal disks, wrap in plastic, and refrigerate for at least 2 hours.
Step 7: Preheat your oven to 350°F (175°C) and line two baking sheets with parchment paper.
Step 8: Roll out one disk of dough to 1/8-inch thickness and cut out circles. Use a smaller shape to cut centers out of half the circles.
Step 9: Bake for 10-12 minutes or until edges are barely golden. Let cool completely on a wire rack.
Step 10: Dust the cookies with cutouts with powdered sugar. Spread jam on the solid cookies and top with the sugared cutout cookies.