You are correct. TN is not in the dropdown menu for the W2 because TN does not tax wages. On your W2 AL should be the only state and the wages in box 16 should be the same as box 1.
At the bottom of the "My Info" section be sure you have indicated that you did not earn income in any other state. You do not need to file a return for TN.
Be sure you have not indicated anywhere in the AL interview that you earned income in TN. You only need to file an AL resident return with all wages and income reported to AL only. Again the W2 state area should only have AL and the state wages should match box 1. The state ID number can be the federal id number without the dash if there is not one entered.
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