The traditional IRA contribution should be nondeductible, please check Form 8606 that it lists the $3,000 contribution on line 1. Then the conversion should be tax-free and line 4b of Form 1040 should only list the earnings of the excess contribution (from the created Form 1099-R with code PJ box 2a.)
Yes, only the earnings on the excess contribution will be subject to the 10% early withdrawal penalty and this will be calculated on Form 5329 part I.
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