Combine all ingredients: In a microwave-safe bowl, combine 1/4 cup unsalted butter, 1/2 cup granulated sugar, 1/2 cup packed brown sugar, and 1/2 cup sweetened condensed milk. Stir until the mixture is well combined.
Microwave the mixture: Place the bowl in the microwave and set the timer for 1 minute. After a minute, remove the bowl and stir the mixture thoroughly. This step ensures that the sugars dissolve evenly.
Continue microwaving: Return the bowl to the microwave and heat in 30-second intervals, stirring after each interval. Monitor the mixture, which will take about 5 to 6 minutes in total, until it becomes smooth and fully combined.
Check for doneness: To test the caramels, drop a small spoonful of the mixture into a bowl of cold water. If it forms a soft ball that holds its shape, it’s ready. If not, microwave it for another 30 seconds and test again.
Pour into a dish: Once ready, pour the caramel mixture into a greased 8-inch square dish. Use a spatula to spread it evenly to ensure uniform thickness.
Cool and cut: Allow the caramels to cool for 1 to 2 hours at room temperature. Once set, cut them into squares of your desired size.
Wrap or enjoy: Wrap each caramel in wax paper to keep them fresh for sharing, or keep them all for yourself—it’s hard to resist!