Discussion on: What is the worst question you have ever been asked in a job interview?

Correct. But I think you are misinterpreting the question. They don't care if you are green card instead of US citizen. They just want to make sure you are EITHER of those two. You can simply say "yes" without more details if that's the case.

The conversation will either go like this

Interviewer: "Are you a US Citizen or permanent resident with a green card?"

You: YES

Interviewer: Thanks.

Or it will go like this:

Interviewer: "Are you a US Citizen or permanent resident with a green card?"

You: No, but I do have an H1-B that is still valid for 3 more years, and I'll need to apply for green card status before the end of that period.

Interviewer: Thanks. Let's discuss that process some more.

Or perhaps this:

Interviewer: "Are you a US Citizen or permanent resident with a green card?"

You: No, I'm currently on an L1 visa from my current company, and will need H1-B or similar sponsorship to work here.

Interviewer: Thanks. Since we are looking to hire for this position immediately, we may not be able to proceed.