Schengen visa application rejected because my US visa stamp expires in December. What are my options?

All the Schengen rules from here to Land's End will not help you if the consulate is rejecting your application, but briefly a Schengen member can reject your application if your travel document will have less than 90 days validity on your planned departure from Schengen. For your purposes, "travel document" means passport. It has nothing to do with the visas in your passport or your current immigration status in the USA.

Some members will add a rule for individuals who are not applying in their home country and the rule will stipulate that a given immigration status is required. This varies according to the individual's nationality vis-a-vis the member state.

If the Italian consulate in Washington will not allow you to apply and you think you are entitled to apply, you can wait and come back when someone else is on the desk and try your luck again. Sometimes this works. You can also play it risky and apply at the consulate of a different member. If the problems persist, then you have three options...

1. Extend your USA visa so that it meets their requirements. This avenue has been addressed in other answers (and compellingly so in the comments accompanying other answers);

2. You can return to your own country and make your application there. This will obviate the issues associated with your USA visa;

3. You can claim that the above two options are disproportionate and refer them to Section 2.8 of the handbook...

As written, the onus will be upon you to explain why it is excessive for you to carry out options 1 and 2: "It is for the consulate to appreciate whether the justification presented by the applicant is acceptable". Success will strongly depend upon your personal impact and articulation skills.

If none of these options work out for your visit contemplated in October, then you will need to reschedule it to a more appropriate time.

I was in a similar situation too and was Googling desperately to figure out if I would get a visa. I found this thread then, so I am mentioning my experience as a reply to this post - I hope this is useful to someone!

The US visa on my passport expired in Apr2016, but I have an I797 valid until May2019. I wanted to spend a week vacationing in France on the way to my home country. I was a little apprehensive on how the rule would be interpreted, but my interview at the French Consulate in San Francisco last week was very smooth :) I showed them the I797s and the officer did not even ask about the expired visa stamp - and in fact there were no other queries or requests for additional documents beyond their checklist . I got the passport back in 3 days. The visa granted was multiple-entry with dates valid for 2 days before/after my journey begin/end dates. I had expected a 90 day visa but it doesn't really matter as I am planning to stick to those dates anyway.

Vive la France !

-B

I wanted to keep it short, as it is a really basic question with an easy answer, but after reading comments I'll expand it a bit.

TL;DR

To enter the Schengen area you need a travel document for you next destination, valid for at least 90 days after the day you plan to leave; this is by law, so you have no options around this.

Your only option is to get a US Visa extension.

Longer version

http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32009R0810

http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex:32006R0562

I tried to quote those here, but honestly it take too much. For all who needs to better understand things just read them, is just a couple of hours and fully understandable.

Basic points are:

• To be allowed to enter Schengen area you must demonstrate be able to sustain yourself while there (ok, just ignore this)
• To be allowed to enter Schengen area you must demonstrate to have the right to stay here indefinitely or to be able to exit from it. Notice: exiting, not just going back to starting the point. You just need to demonstrate that you can reach your next destination, whatever it may be.
• You are an US immigrant, not an US resident, thus your passport should not have been issued by US government but from the government of the nation you reside. Your passport is always valid to enter your nation of residence
• As you are an alien, your actual passport is not a valid document per-se stating that you can enter USA
• You have an I permit, that allow you only to stay in US
• You have an I permit, that do not grant you the right to enter US
• You have a Visa allowing you to enter USA from a POE (Point of Entry)
• The above are NOT LINKED, you can have one without the other, they serve different purposes.
• As for your flight tickets, you are leaving from USA and affirming you will be going back to USA. Thus you need to demonstrate you will be able to reenteR USA
• For leaving USA you need a valid passport and to reenter you need it, too. Passport scope is simply to certify your identity internationally, it has no other function per se.
• To enter USA you need a valid document attesting you can actually do it. Your Visa is enough, and it is still valid, so this is ok.
• To enter Schengen, you need to testify that you will be able to still enter USA after three months of the date of the intended departure:

From the first link above:

Article 12

Travel document

The applicant shall present a valid travel document satisfying the following criteria:

(a)

its validity shall extend at least three months after the intended date of departure from the territory of the Member States or, in the case of several visits, after the last intended date of departure from the territory of the Member States. However, in a justified case of emergency, this obligation may be waived;

Again, your passport per se is not a valid document to reenter the USA, as you are an alien. But your passport with an US Visa on, it is. So, for your passport to be a document whose validity extend at least three months after the intended date of departure from the territory of the Member States it must have a Visa on it valid three months after the intended date of departure etc. etc. etc.

So, again, to solve your problem you need an extension to your US Visa. How to do that or if it is possible...well, I honestly don't know.