In a microwave-safe bowl, combine the white chocolate chips, sweetened condensed milk, and a few drops of yellow food coloring (if using). Heat the mixture in 30-second increments at half power, stirring well between each increment, until smooth and creamy.
Stir in the lemon zest, limoncello, and 2 cups of the confectioner’s sugar. If you prefer an alcohol-free version, substitute the limoncello with ½ tablespoon of lemon juice and ½ tablespoon of vanilla extract. For a tart twist, you can use 1 full tablespoon of lemon juice instead of the limoncello.
Cover the mixture and refrigerate for 2 hours to firm up.
Once chilled, place the remaining 1 cup of confectioner’s sugar into a shallow bowl and line a baking sheet with parchment paper.
Measure out a heaping teaspoon of the chilled mixture, roll it into a ball, and then coat it in confectioner’s sugar. Place the truffle on the parchment-lined baking sheet.
Repeat with the remaining mixture. Once all the truffles are formed, refrigerate the baking sheet for an additional hour to let the truffles set.
Transfer the truffles to a food-safe container with a lid. Keep refrigerated until ready to serve.