If taxes are withheld at the time of the conversion, credit is given for that from the 1099-R entries. The full tax is then reconciled on the tax return when you file at the end of the year. It can be more or less than the withholding paid at the time of the conversion.
However, that is different from a penalty - so it sounds like something else may be going on here. Where are you seeing the $600 tax or penalty that is of concern? A little more detail may allow us to help you troubleshoot this better.
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