It’s A Knockout

What was needed?

A knockout to allow for an inner glow with the image behind free to be manipulated.

Create a cornered rectangle in front of a slightly larger rectangle and place both within a group.

In Blending Options: Custom > Advanced Blending choose Knockout value of Shallow.If layers are not placed in a group the knockout works on all except the background layer.If Deep is used all layers below the group are knocked out.