I found this from Debra Lynn Dadd's website. In her book, "Home Safe Home", she says....
"Many textile products are treated with formaldehyde. Even if not istated on the label, all polyester/cotton-blend fabrics have formaldehyde finishes. Polyester/cotton bedsheets have a particularly heavy finish because of their continuous use and frequent laundering. Formaldehyde is also used on nylon fabrics to make them flameproof, and some pure-cotton fabrics also have been treated with formaldehyde finishes for easy care.
The finishing process combines formaldehyde resin directly with the fiber, making the formaldehyde irremovable. At the end of processing, new textile products often contain free-formaldehyde levels of 800 parts per million ppm to 1,000 ppm. Simple washing can lower these levels to 100 ppm, but formaldehyde continues to be release as the resin breaks down during washing, ironing, and wear.
Formaldehyde vapor inhalation can cause tiredness, insomnia, headaches, respiratory problems, coughing, watery eyes, excessive thirst, and many other common symptoms. Exposure also can aggravate asthma attacks. Contact with formaldehyde finishes can result in mild to severe skin rash...
Because the formaldehyde in polyester is in the finish, not the fiber itself, it will lessen over time as it offgasses. The offgassing is highest when the item is new and decreases with each washing, and with wear.
Logic tells me that the formaldehyde finish never completely washes out, because the it is designed to stay on the fabric for the life of the garment. If it was completely gone, the fabric would wrinkle because the finish is there to keep the fabric wrinkle-free.
That said, after many washings the finish probably outgasses very little formaldehyde, if any. "
It's scary!!! Formaldehyde is everywhere!