In a large mixing bowl, combine the warm milk (or water), 1 teaspoon of granulated sugar, and the active dry yeast. Stir gently and let it sit for 5-10 minutes until foamy.

In a separate medium bowl, whisk together the gluten-free flour blend, remaining ¼ cup of granulated sugar, and salt. If your flour blend does not contain xanthan gum, whisk it in here as well.

Once the yeast is foamy, add the lightly beaten egg, melted butter (or oil), and vanilla extract (if using) to the yeast mixture. Whisk briefly to combine.

Gradually add the dry ingredient mixture to the wet ingredient mixture, mixing by hand or with a stand mixer until just combined.

Cover the bowl tightly with plastic wrap and let it rise in a warm, draft-free spot for 1 to 1.5 hours until it has almost doubled in size.

Once risen, punch down the dough gently and turn it out onto a lightly floured surface.

Pat or roll the dough out to a rectangle approximately ½ inch thick, then cut it into 2-inch squares.

Place the cut beignets on a lightly floured baking sheet, cover loosely, and let them rest for 20-30 minutes.

In a heavy-bottomed pot, heat the oil to 350-360°F (175-180°C).

Carefully lower 3-4 beignets at a time into the hot oil and fry for about 1-2 minutes per side, or until golden brown.

Remove beignets with a slotted spoon and transfer them to a wire rack lined with paper towels to drain excess oil.

Dust with powdered sugar while still warm and serve immediately.