Line an 8x8 inch baking dish with parchment paper, leaving an overhang on the sides.

In a medium saucepan over medium-low heat, combine the sweetened condensed milk, butter, and salt. Stir constantly until the butter is melted and the mixture is smooth.

Reduce heat to low and simmer for 5 minutes, stirring frequently to prevent burning. The mixture will thicken slightly.

Remove from heat and stir in the vanilla extract.

Gradually add the powdered sugar and flour, mixing until a smooth dough forms. Be sure to remove any lumps.

Stir in the rainbow sprinkles, if using.

Press the fudge mixture evenly into the prepared pan.

Refrigerate for at least 2 hours, or until firm.

Lift the fudge out of the pan using the parchment paper overhang. Cut into squares and serve.