1Heat oven to 325°F. In large bowl, beat butter and 1/2 cup powdered sugar with electric mixer on medium speed until creamy. Stir in flour, salt, vanilla and nuts.
2Shape dough into 1 1/4-inch balls. On ungreased cookie sheet, place balls about 1 inch apart. Press thumb into center of each cookie to make indentation, but do not press all the way to the cookie sheet.
3Bake 15 to 17 minutes or until set but not browned. Quickly remake indentation with end of wooden spoon handle if necessary. Remove from cookie sheet to cooling rack; cool completely, about 30 minutes.
4Fill each thumbprint with about 1 rounded teaspoonful of jam. Sprinkle 2 tablespoons powdered sugar over jam-filled centers.