Young students are like sponges. They can easily absorb anything that can be taught to them, given the right tools.
Many believe that it is tough for young children to learn Taiji. But Taiji can really be cultivated from a young age. Young students can start doing basic stretches and qigong, then move on to the movements that will later be connected into a full form. It is important to have patience and creativity any time you're working with kids. The goal is to get the students to see Taiji as not just slow and boring, but as a martial art with simple yet effective applications that are just as exciting to execute as the other flashier Martial arts. Taiji today is used to provide health benefits due to it's slow movements and breathing concentration, but do not forget that Taiji is rooted in martial arts not just physical therapy.
Start with the basics
It is important to lay a solid foundation. That means making sure the children understand the importance of stances and movements in Taiji. Teaching them the basic stances and movements challenges them both on a physical and mental level. Their minds have to be strong to commit to the repetitive nature of martial arts practice. And with all that practice, their bodies adapt to the physical demands of the exercises and applications.
The discipline children develop learning the basics will help pay off as they learn the more advance movements implied in Taiji: advancing and retreating, looking left, striking right, etc.
Children tend to be more physical then mental and are easily able to mimic movements as well as their applications. But they also have shorter attention spans than adults. To keep them both physically and mentally engaged, the application must immediately follow after the movements have been executed. As the student gets older they will be able look at the movements and applications with a more open mind and a more relaxed attitude. This will bring more balance to both the physical and mental aspects of Taiji.
Most importantly, always remember to involve the young student in more physical exercises that involve the movements that will later be taught.