Line an 8x8 inch metal baking pan with parchment paper, ensuring excess hangs over the sides for easy removal.

In a large microwave-safe bowl, combine milk chocolate chips, sweetened condensed milk, butter, and espresso powder. Cover lightly without stirring.

Microwave on high for 1 minute 30 seconds. Let sit 30 seconds, then whisk until smooth, adding Kahlua and vanilla. Microwave further if needed.

Pour the mixture into the prepared pan, spreading evenly. Tap to release air bubbles.

Refrigerate for at least 4 hours, preferably overnight, until set.

Lift fudge from pan using overhanging parchment, place on a cutting board, and cut into 64 1x1 inch squares.