"I could empty the account before years end but roth converting it would've taken until the next year,"
Whether the conversion is done directly or indirectly, the timing of a Roth conversion is based on when the distribution from the traditional IRA occurs. Even if not deposited until early 2026, depositing the $1030.61 into a Roth IRA within 60 days of the date of the distribution would have resulted in it being a Roth conversion reportable on the 2025 tax return.
"shouldn't I have to pay more?"
No, you shouldn't pay more. Only the taxable portion of an early-distribution is subject to penalty.
Note that after applying $899 of basis to the $1030.61 distribution, $6,101 of basis remains to apply to the conversion of the $7,000. The result is that the taxable amount of the Roth conversion of the $7,000 is $899. A Roth conversion is not subject to an early-distribution penalty, so that $899 taxable portion of the Roth conversion is not subject to penalty.
