Anyone who says that squatting past parallel is bad for your kness is an idiot. Squatting low (past parallel) is better for your knees than squatting to and above parallel, assuming that you are doing it correctly.
Most people have spent their lives seated (myself included) and have trained themselves against their natural ability to squat down. Most people have lost their flexibility and are no longer able to squat low without rounding their lower back, shifting the weight to their toes (very bad for your knees) or falling forward.
The best thing you can do is learn to squat as low as possible correctly.
And yes, your knees can go past your toes as long as you are squatting correctly.