SSMS cannot determine if remote computer is connected to domain
This is an issue with the picker for selecting accounts when it cannot connect to the SMB port (or if NetBIOS isn't enabled, but you state that it works if you disable the firewall).
You can either try to open port 445 on the firewall or create the login using T-SQL.
There used to be a Microsoft KB Article for older versions of Windows but I believe this still applies.