A refund of federal income tax is not taxable federal income.
However, Alabama allows a state income tax deduction for federal taxes you pay. If you deducted your federal income tax bill on your 2011 Alabama state income tax return, then the payment is taxable state income only (it is a reimbursement of a previous deduction, since you deducted it before, you owe tax on it now.)
I don't have Alabama installed on my computer, so I don't know exactly where it will be in the program. When you work on your state taxes, look for state-specific additions to or adjustments to your taxable income. There may be a specific place to add federal income tax refunds, or a more general place to add back any refund of a previous deduction.
