Are you seeing an underpayment penalty (Form 1040 line 24) or an early-distribution penalty (Schedule 2 line 6)?
If the penalty is an underpayment penalty, you might need to annualize income, deductions and credits to reduce or eliminate the underpayment penalty, particularly if the conversion was done late in the year.
If you are seeing an early-distribution penalty on the amount converted to Roth, you've entered it incorrectly. What is the code in box 7 of the form 1099-R? Is the IRA/SEP/SIMPLE box marked? Was the entire amount in box 1 converted to Roth?
