SSPI handshake failed with error code 0x8009030c, state 14 while establishing a connection with integrated security; the connection has been closed

I came across a scenario where a more unusual “SSPI Handshake errors” regularly appeared in the error log. In this blog, I am covering the cause of this issue and the solution we followed to fix it:

In the Sql Server error log the below entries was logged:

SSPI handshake failed with error code 0x8009030c, state 14 while establishing a connection with integrated security; the connection has been closed. Reason: AcceptSecurityContext failed. The Windows error code indicates the cause of failure. The logon attempt failed   [CLIENT: XX.XX.XXX.XX]

Error: 17806, Severity: 20, State: 14.
Login failed. The login is from an untrusted domain and cannot be used with Windows authentication. [CLIENT: XX.XX.XXX.XX]

After checking the web.configs on the webserver with the above IP adress I found the C# application that was the cause of the error. First I tought this would be a easy fix with a simple security policy error. But after verifying the account's "domain\sqlaccount" had "Access this computer from the network” in "Local security policy (secpol.msc)". I was out of ideas.

Online I got the tips to change the faulty connection string on data source to use SQL authentication instead of windows authentication. But that is not good enough solution.

After falling back to my old wisdom. RTFEM - Read the Fucking Error Message. I got a hint from untrusted domain.