A great homemade recipe for caramel icing is found on Food.com. It requires butter, brown sugar, milk and powdered sugar. This recipe takes about 15 minutes to complete and yields four servings.
To make homemade caramel frosting, melt 1/2 cup butter in a pan. While stirring constantly, add 1 cup brown sugar and bring to a boil for two minutes. Next, add 1/4 cup milk, still stirring, and bring to a boil again. Remove the pan from the heat and allow it to cool down. Transfer the liquid into a bowl and add a total of 2 cups of powdered sugar. Be sure to only add small amounts of powdered sugar at a time and beat the mixture very well after each addition.
An alternate recipe is found on AllRecipes.com and is called Caramel Frosting V. For this recipe, combine 1 cup heavy whipping cream and 1 pound brown sugar into a medium-sized sauce pan. Bring this mixture to a rolling boil for 1 minute. Slowly add 1/2 teaspoon baking soda and boil for another minute.
Next, remove the sauce pan from the heat and add 1/2 cup butter, without stirring. Allow the mixture to cool and beat very well. For an added crunch, stir in chopped pecans.