Preheat oven to 350 degrees F. In large bowl, with mixer at low speed, beat sugar and margarine or butter until blended.
Increase speed to high; beat until light and fluffy, about 5 minutes. At medium speed, beat in ricotta, vanilla, and eggs until well combined
Reduce speed to low. Add flour, baking powder, and salt; beat until dough forms.
Drop dough by level tablespoons, about 2 inches apart, onto ungreased large cookie sheet. Bake about 15 minutes or until cookies are very lightly golden (cookies will be soft). With pancake turner, remove cookies to wire rack to cool. Repeat with remaining dough.
When cookies are cool, prepare icing: In small bowl, stir confectioners\' sugar and milk until smooth. With small metal spatula or knife, spread icing on cookies; sprinkle with red or green sugar crystals. Set cookies aside to allow icing to dry completely, about 1 hour.