Prepare the yeast mixture by combining warm milk, active dry yeast, and a pinch of sugar in a small bowl. Let it sit until frothy.

Mix the wet ingredients by whisking together the yeast mixture, granulated sugar, egg, vanilla extract, and salt.

Incorporate the flour gradually into the wet mixture, mixing until a soft dough forms and knead for 5-7 minutes.

Allow the dough to rise in a greased bowl for 1 to 1.5 hours until doubled in size.

Shape the beignets by rolling the dough and cutting it into squares, about 3 inches in size.

Heat vegetable oil in a deep fryer or pot to 350°F (175°C).

Fry the beignet squares for 1-2 minutes on each side until golden brown.

Drain on paper towels and dust with powdered sugar while still warm.