Hey, Rick, long time no see!  Glad to hear that you did not spend time with Rona at all.

My take is that Congress and the Treasury intend for the application of these exceptions to be sufficiently broad without strings of quantitative or qualitative conditions attached, recognizing that the economic impact of the pandemic is far and wide.

Sec. 1(B) of Notice 2020-50 simply restates Sec. 2202(a)(4)(A)(ii), which stipulates that "coronavirus-related distributions" are generally distributions made during 2020 to an individual:

• (I) who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (referred to collectively in this notice as COVID-19) by a test approved by the Centers for Disease Control and Prevention (including a test authorized under the Federal Food, Drug, and Cosmetic Act);
• (II) whose spouse or dependent (as defined in section 152 of the Code) is diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention (including a test authorized under the Federal Food, Drug, and Cosmetic Act; or
• (III) who experiences adverse financial consequences as a result of:
  • the individual being quarantined, being furloughed or laid off, or having work hours reduced due to COVID-19;
  • the individual being unable to work due to lack of childcare due to COVID-19; or
  • closing or reducing hours of a business owned or operated by the individual due to COVID-19.

Reliant on the authority given the Treasury by subparagraph (a)(ii)(III) to prescribe "other factors", Notice 2020-05 further expands the application, in a similar vein, to:

• individuals who, due to COVID-19, have their pay (or self-employed income) reduced, job offer rescinded, or start date for a job delayed; and
• the individual's spouse or a household member who meet the same conditions.

While it is true that the clause "who experiences adverse financial consequences as a result of" the various conditions places the burden of proof on the taxpayer, IMHO, it should merely be read that adverse financial consequences are presumptive so long as the individual meets any of the criteria outlined.

Neither the text of the CARES Act nor Notice 2020-50 impose any additional requirements to qualify or quantify such "adverse financial consequences" other than to have the individual provide a simple self-certification on which plan administrators may rely upon unless they already possess sufficiently accurate information to determine the veracity of such a certification.

So long as the business owner can document and ascertain that the business was closed or that the operating hours were shortened in light of the pandemic, that may be sufficient ground for purposes of claiming the relief, in spite of her maintaining her full-time job.  This being a newly-founded business, I would think that making sure she is able to compare her business plan as well as projected financials against actual reduced operation and performance, if it becomes necessary, would be a good starting point.