This link below is how to set it up properly

http://www.jasonsamuel.com/2012/01/05/how-to-fix-pass-through-authentication-the-windows-2008-logon-screen-on-xenapp-6-5web-interface-5-4-using-citrix-receiver/

These additional steps helped me in different networks solve the problem so I just do all of it now.

Log into Active Directory and right click each XenApp Server and choose properties. Go to the delegation tab and select the radio icon “Trust this computer for delegation”

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Then…

Add this under the WFClient: section in the default.ica file located in the C:\inetpub\wwwroot\citrix\XenApp\conf folder on the web interface server:

EnableSSOnThruICAFile=On 
SSOnUserSetting=On 

Finally…

Log into each XenApp server and change the order of preferred networks

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