Preheat oven to 350 degrees. Line 12 muffin cups with paper baking cups.
In a large bowl, sift together the flour, baking powder, and salt, and set aside.
In a separate bowl, cream together the butter, sugar, and vanilla with an electric mixer. Add the eggs, one at a time, beating well after each addition, then add the milk. Slowly add the flour mixture and combine until the batter is uniform. Do not overmix.
Fill each cupcake liner halfway with batter. Drop a tablespoon of the jam in the center of each cupcake and then top with more batter so they are a little more than three-quarters full.
Bake for 20 minutes or until the cupcakes spring back when touched lightly. Let them cool completely before icing with Peanut Butter Frosting.
To make frosting: In a large mixing bowl, use an electric mixer to whip the butter and peanut butter together. Add the confectioners’ sugar, salt, and then the milk. Add additional tablespoons of milk or sugar to loosen or tighten the icing, respectively. For best results, use immediately.