Line an 8x8 inch pan with parchment paper, leaving overhang for easy removal.

In a medium saucepan, combine sweetened condensed milk, butter, and eggnog. Heat over low-medium heat until butter melts and mixture is warm.

Gradually add white chocolate chips, stirring continuously until smooth and fully melted.

Stir in vanilla extract, ground nutmeg, and optional rum extract if desired.

Pour fudge mixture into prepared pan and smooth the top with a spatula.

Sprinkle with chopped nuts and festive sprinkles.

Let fudge cool at room temperature for 2–3 hours or refrigerate for 1–2 hours until firm.

Lift fudge from pan using parchment overhang and cut into squares or rectangles.

Serve immediately or package for gifting.