Configuration interaction calculations of the ground and excited states of the H2CO molecule adsorbed on the Ag(111) surface have been carried out to study the photoinduced dissociation process leading to polymerization of formaldehyde. The metal-adsorbate system has been described by the embedded cluster and multireference configuration interaction methods. The pi* electron-attachment H2CO- and n-pi* internally excited H2CO* states have been considered as possible intermediates. The calculations have shown that H2CO* is only very weakly bound on Ag(111), and thus that the dissociation of adsorbed formaldehyde due to internal excitation is unlikely. By contrast, the H2CO anion is strongly bound to Ag(111) and gains additional vibrational energy along the C-O stretch coordinate via Franck-Condon excitation from the neutral molecule. Computed energy variations of adsorbed H2CO and H2CO- at different key geometries along the pathway for C-O bond cleavage make evident, however, that complete dissociation is very difficult to attain on the potential energy surface of either of these states. Instead, reneutralization of the vibrationally excited anion by electron transfer back to the substrate is the most promising means of breaking the C-O bond, with subsequent formation of the coadsorbed O and CH2 fragments. Furthermore, it has been demonstrated that the most stable state for both dissociation fragments on Ag(111) is a closed-shell singlet, with binding energies relative to the gas-phase products of similar to 3.2 and similar to 1.3 eV for O and CH2, respectively. Further details of the reaction mechanism for the photoinduced C-O bond cleavage of H2CO on the Ag(111) surface are also given.