1. Preheat oven to 350 degrees.
2. Beat butter and sugar until light in color and fluffy, about 2-3 minutes.
3. Add eggs, one at a time, beating just until blended.
4. Add vanilla, water and cocoa powder to another bowl and whisk until smooth.
5. Add chocolate mixture to batter and mix until combined. Scrape down the sides of the bowl as needed to make sure everything is well combined.
6. Combine flour and baking soda in a separate bowl.
7. Alternate adding the flour mixture and kahlua to the batter. Begin by adding half of the dry mix, then mix well. Add the kahlua and mix well, scrapes down the sides as needed. Add the remaining flour mixture and beat until smooth.
8. Fill cupcake liners about half way. Bake for 16-18 minutes, or until a toothpick inserted comes out with a few crumbs.
9. To make icing, beat butter and shortening until smooth.
10. Add 2 cups of powdered sugar and beat until smooth.
11. Add 4 tbsp Kahlua and remaining powdered sugar and beat until smooth. Add additional Kahlua if needed to get the right icing consistency.
12. Pipe icing onto cupcakes. I used Ateco icing tip 844, which is similar to the Wilton 1M.
13. Drizzle cupcakes with caramel sauce and a sprinkle of sea salt.