diff --git a/packages/addon-dev/src/rollup-hbs-plugin.ts b/packages/addon-dev/src/rollup-hbs-plugin.ts
index b93b03e0b..db35a35fd 100644
--- a/packages/addon-dev/src/rollup-hbs-plugin.ts
+++ b/packages/addon-dev/src/rollup-hbs-plugin.ts
@@ -1,14 +1,13 @@
 import { createFilter } from '@rollup/pluginutils';
 import type { Plugin, PluginContext, CustomPluginOptions } from 'rollup';
 import { readFileSync } from 'fs';
-import { hbsToJS } from '@embroider/core';
+import { correspondingTemplate, hbsToJS } from '@embroider/core';
 import minimatch from 'minimatch';
-import { parse as pathParse } from 'path';
 
 export default function rollupHbsPlugin({
-  templates,
+  excludeColocation,
 }: {
-  templates?: string[];
+  excludeColocation?: string[];
 }): Plugin {
   return {
     name: 'rollup-hbs-plugin',
@@ -26,7 +25,7 @@ export default function rollupHbsPlugin({
           source,
           importer,
           options,
-          templates
+          excludeColocation
         );
       }
     },
@@ -74,30 +73,22 @@ function getHbsToJSCode(file: string): { code: string } {
   };
 }
 
-function correspondingTemplate(filename: string): string {
-  let { ext } = pathParse(filename);
-  return filename.slice(0, filename.length - ext.length) + '.hbs';
-}
-
 async function maybeSynthesizeComponentJS(
   context: PluginContext,
   source: string,
   importer: string | undefined,
   options: { custom?: CustomPluginOptions; isEntry: boolean },
-  templates: string[] | undefined
+  excludeColocation: string[] | undefined
 ) {
-  let templateResolution = await context.resolve(
-    correspondingTemplate(source),
-    importer,
-    {
-      skipSelf: true,
-      ...options,
-    }
-  );
+  let hbsFilename = correspondingTemplate(source);
+  let templateResolution = await context.resolve(hbsFilename, importer, {
+    skipSelf: true,
+    ...options,
+  });
   if (!templateResolution) {
     return null;
   }
-  let type = templates?.some((glob) => minimatch(source, glob))
+  let type = excludeColocation?.some((glob) => minimatch(hbsFilename, glob))
     ? 'template-js'
     : 'template-only-component-js';
   // we're trying to resolve a JS module but only the corresponding HBS
diff --git a/packages/shared-internals/src/index.ts b/packages/shared-internals/src/index.ts
index cbf236beb..2cb7f5b42 100644
--- a/packages/shared-internals/src/index.ts
+++ b/packages/shared-internals/src/index.ts
@@ -1,5 +1,5 @@
 export { AppMeta, AddonMeta, PackageInfo } from './metadata';
-export { explicitRelative, extensionsPattern, unrelativize, cleanUrl } from './paths';
+export { explicitRelative, extensionsPattern, unrelativize, cleanUrl, correspondingTemplate } from './paths';
 export { getOrCreate } from './get-or-create';
 export { default as Package, V2AddonPackage as AddonPackage, V2AppPackage as AppPackage, V2Package } from './package';
 export { default as PackageCache } from './package-cache';
diff --git a/packages/shared-internals/src/paths.ts b/packages/shared-internals/src/paths.ts
index a1e0ed123..5d5ea6dbe 100644
--- a/packages/shared-internals/src/paths.ts
+++ b/packages/shared-internals/src/paths.ts
@@ -1,4 +1,4 @@
-import { relative, isAbsolute, dirname, join, basename, resolve, sep } from 'path';
+import { relative, isAbsolute, dirname, join, basename, resolve, sep, parse as pathParse } from 'path';
 import type Package from './package';
 
 // by "explicit", I mean that we want "./local/thing" instead of "local/thing"
@@ -49,3 +49,10 @@ const postfixRE = /[?#].*$/s;
 export function cleanUrl(url: string): string {
   return url.replace(postfixRE, '');
 }
+
+// given a filename, returns it with the hbs extension
+// for instance, passing filename.js returns filename.hbs
+export function correspondingTemplate(filename: string): string {
+  let { ext } = pathParse(filename);
+  return filename.slice(0, filename.length - ext.length) + '.hbs';
+}
diff --git a/packages/shared-internals/src/template-colocation-plugin.ts b/packages/shared-internals/src/template-colocation-plugin.ts
index 4fcbaab0d..8004dbadb 100644
--- a/packages/shared-internals/src/template-colocation-plugin.ts
+++ b/packages/shared-internals/src/template-colocation-plugin.ts
@@ -7,7 +7,7 @@ import { explicitRelative, PackageCache } from '.';
 import { ImportUtil } from 'babel-import-util';
 import makeDebug from 'debug';
 import minimatch from 'minimatch';
-import { cleanUrl } from './paths';
+import { cleanUrl, correspondingTemplate } from './paths';
 
 const debug = makeDebug('embroider:template-colocation-plugin');
 
@@ -75,7 +75,7 @@ export default function main(babel: typeof Babel) {
             }
           }
 
-          if (state.opts.exclude?.some(glob => minimatch(filename, glob))) {
+          if (state.opts.exclude?.some(glob => minimatch(correspondingTemplate(filename), glob))) {
             debug('not handling colocation for %s', filename);
             return;
           }
diff --git a/tests/scenarios/v2-addon-dev-test.ts b/tests/scenarios/v2-addon-dev-test.ts
index a68673073..b08435f93 100644
--- a/tests/scenarios/v2-addon-dev-test.ts
+++ b/tests/scenarios/v2-addon-dev-test.ts
@@ -30,7 +30,7 @@ appScenarios
         {
           "plugins": [
             ["@embroider/addon-dev/template-colocation-plugin", {
-              exclude: ['**/just-a-template.js'],
+              exclude: ['**/just-a-template.hbs'],
             }],
             "@babel/plugin-transform-class-static-block",
             ["babel-plugin-ember-template-compilation", {
@@ -74,7 +74,7 @@ appScenarios
             }),
 
             addon.hbs({
-              templates: ['**/just-a-template.js'],
+              excludeColocation: ['**/just-a-template.hbs'],
             }),
             addon.gjs(),
             addon.dependencies(),