Yes, if you took a deduction for it on a prior year return, then you would add it back to income in 2016. If you claimed the deduction on the 2016 return and just received the refund now, in 2017, then that'll go as income on next year's return (assuming you work on a calendar year). You can call it "Refund of prior yr expenses" or something similar.
If no deduction was taken, then you don't need to claim it as income.
