1099-MISC Box 3 - other income

A company damaged my car with their machinery in 2021. They gave me a check for the exact amount it cost to fix my car and rent a vehicle while the car was in the shop. The full amount given to me was $2477.49. The company that caused damages to my car told me I would not have to pay taxes on this money and it would not affect me in adding income to my work income when I filed.

 

I just received a 1099-MISC with the income in box 3. 

 

Will this income be added to my total income and will I be taxed for it? Is there a way I can report it and then remove the income so it does not count as income? From my understanding this type of income is not taxable because it was paid to fix the car they damaged, the exact amount so I did not keep any money.

 

Please help!