Preheat the air fryer to 350°F (175°C).
In a large mixing bowl, whisk together the flour, 1 cup sugar, baking powder, salt, and 1/2 teaspoon cinnamon until well combined.
In a separate bowl, mix the milk, melted butter, egg, and vanilla extract until smooth.
Pour the wet ingredients into the dry ingredients and stir until just combined. Do not overmix.
Lightly grease a donut pan or silicone mold. Spoon the batter into the molds, filling each about halfway.
Place the filled molds in the air fryer basket and cook for 5-6 minutes, or until the donuts are golden brown and a toothpick inserted comes out clean.
While the donuts are cooking, combine the 1/4 cup sugar and 1 teaspoon cinnamon in a small bowl for the coating.
Once the donuts are done, remove them from the air fryer and let them cool for a few minutes.
While still warm, toss each donut in the cinnamon sugar mixture until fully coated.
Serve warm and enjoy!