The chemical transformations of formamide (NH2CHO), a molecule of prebiotic interest as a precursor for biomolecules, are investigated using methods of electronic structure computations and Rice-Rampserger-Kassel-Marcus (RRKM) theory. Specifically, quantum chemical calculations applying the coupled-duster theory CCSD(T), whose energies are extrapolated to the complete basis set limit (CBS), are carried out to construct the [CH3NO] potential energy surface. RRKM. theory is then used to systematically examine decomposition channels leading to the formation of small molecules including CO, NH3, H2O, HCN, HNC, H-2, HNCO, and HOCN. The energy barriers for the decarboxylation, dehydrogenation, and dehydration processes are found to be in the range of 73-78 kcal/mol. H-2 loss is predicted to be a one-step process although a two-step process is competitive. CO elimination is found to prefer a two-step pathway involving the carbene isomer NH2CHO (aminohydroxymethylene) as an intermediate. This CO-elimination channel is also favored over the one-step H-2 loss, in agreement with experiment. The H2O loss is a multistep process passing through a formimic acid conformer, which subsequently undergoes a rate-limiting dehydration. The dehydration appears to be particularly favored in the low-temperature regime. The new feature identifies aminohydroxymethylene as a transient but crucial intermediate in the decarboxylation of formamide.