I paid Philadelphia Tax and File in NJ, I paid 2K, but am only receiving a credit of 1.5K, why is the $500 not part of my refund?

New Jersey will give you a credit up to the tax that you would've paid in the state on the same income. If the tax that you pay in the other jurisdiction is more than the tax that you would pay in New Jersey, you won't get a credit of everything that you paid to the other jurisdiction. In your case, it seems that the tax that you paid to Philadelphia was higher than the tax that you would have paid to New Jersey.