I'd say they were 10-12 is when my kids figured it out. The eldest became a super help... she loved being in on it and helping us with the youngest. Moved the elf every night, etc. It was our secret and it ruled. The youngest played coy for awhile. The best Christmas ever was when we finally decided she knew, but was too afraid to ruin a good thing. So we decided to call her bluff. We put in the Elf in her stocking. The look on her face when she realized she "stole the magic" was hilarious. That entire Christmas day is still the the best. The curtains were pulled back, on the both the kids and the parents side, and the stories told were fantastic amazingly funny. I am not sure I've laughed as hard for as long before or since. Now that I have two in college, I miss those days. They grow up entirely too fast. Don't rush it.