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I have made this long convoluted answer because it is not clear from your question if you were referring to SS and Medicare taxes paid as an employee in the previous year or were referring to self-employment taxes paid in the previous year. Indeed, it is likely that when you typed "SE tax and Medicare", you actually meant "SS tax and Medicare" and didn't mean self-employment at all.

You asked two questions here, with slightly different terms, but which differ greatly in meaning. In your questions, you asked about "Fed Income Tax only, or SE tax and Medicare too?". However, in your subsequent discussion, you asked about "does it include the employee portion of SS and Medicare paid last year? ". The "SE tax and Medicare [tax]" are treated differently than the "employee portion of SS and Medicare [tax]", for purposes of the 2210 (underpayment of estimated tax).

The term "SE tax" refers to "self-employment" taxes. This is the tax that you pay on income generated not as an employee but as someone self-employed who normally files a Schedule C. The amount of the SE tax is 15.3%.

Currently, employees pay 7.65% in employment taxes: 6.2% for Social Security taxes and 1.45% for Medicare tax. The employer matches this amount by paying a separate 7.65% on your behalf. This employer amount does not appear on your tax return.

You may notice that the 7.65% that the employee pays plus the 7.65% that the employer pays adds up to 15.3% - the same amount of the self-employed person pays for "self-employment" tax. So these amounts end up in the same place: the Social Security Administration who allocates the money to Social Security and Medicare.

However, although these amounts end up in the same places, they are not treated the same way when it comes to estimated taxes.

You asked if the employee portion of SS and Medicare tax should be included in the calculation of 100% of last year's tax. The IRS instructions are found for line 8 on page 4 of Instructions for Form 2210 (2018).

The instructions for figuring the previous year's tax are complicated for the 1040 (much easier for the 1040A, as you see). The last year's income tax for a schedule 1040 filer is the sum of lines 56, 57, 59, 60a, 60b, and 62 (on the 2017 1040), less a number of adjustments (see the box on the upper right of page 4 on the 2210 instructions).

So the answer to your question depends on what you were referring to. Note that line 57 is the SE tax (self-employment) paid in the previous year (assuming that you are looking at your 2017 1040). So the answer is YES to using the SE tax assessed in the previous year for the "taxes paid last year" if you were self-employed in the previous year. But if you were an employee in the previous year, then the answer is NO because the lines I refer to above do NOT include either the employee portion or the employer portion of the SS and Medicare taxes paid on behalf of the employee. 

As for your final question, " if you start a tax year with taxes withheld, then change to 1099 income, will you still get hit with a penalty?", the answer is simply: you may be hit with a penalty is you do not pay enough estimated tax according to the instructions, whether or not you were previously employed by someone else or self-employed.

However, if you count on your fingers, you will realize that the amount of tax that you are assessed for the year on the 1040 will appear to be larger for the self-employed for purposes of estimated taxes, because the prior year tax includes self-employment taxes but does not include SS and Medicare taxes paid as an employee.

And lest you think that this is an unfair burden on the self-employed, it's not. In the case of the employee, it is the employer not the employee who is responsible for collecting these taxes (generically called "payroll taxes") and sending them to the IRS. Any employer who fails to do so is in a world of hurt with the IRS; thus, sensible employers pay the payroll taxes even if they are losing money otherwise. Asking the self-employed to include the SE tax in the estimated tax calculation just applies the same force to pay on-time to the self-employed as to the employer.